Business Journal GBQ q3 2020

Gartner
Business
Quarterly
Third Quarter 2020
In This Issue
How to Rebuild Better
Lasting Redeployment Lessons

From the COVID-19 Crisis
Prioritize Spending That

Differentiates Your Company
The Pandemic, Protests and a

Test of Corporate Commitment
The Next Step for Forging

Trust in AI
As Demand Soars for Pandemic

Analytics, Chief Data Officers
Need a Business Mindset
Decision-Making Principles
Drive Quality and Efficiency
Through Disruption
Gartner
Business
Quarterly
Third Quarter 2020

Research & Advisory Mike Harris, Executive VP
Executive Sponsor Scott Christofferson, Group VP
Letter From the Editor
Welcome to the inaugural issue of Gartner Business Quarterly.
Editor in Chief Judy Pasternak Here is our reason for being: Senior executives have been asking
us for help becoming better business partners and enterprise
Contributors leaders. GBQ will advise you on aligning with others and reaching
Neha Ahuja Vinod Menon maximum effectiveness — so your organization can achieve its
Jason Boldt Cian O'Morain goals, be bold and principled, and bring employees, investors
Steven Brown Laura Reul
and the public along for the ride.
Alexia Cambon Magda Rolfes
Matt Cantrell Mike Rollings Each edition of this journal will tackle a challenge that cuts
Gabriella Cerio Daniel Ryntjes across the C-suite and executive teams. This time, we look at
Sara Clark Rita L. Sallam how your enterprise can rebuild better from the crisis the whole
Laura Cohn Arnav Saxena
world faces now.
James Crocker Ayush Saxena
Svetlana Golden Steve Shapiro The pandemic, protests and recession have laid bare and
Cristina Gomez Emilie Siegler Morton accelerated the impact of tough choices deferred. In this
Reuben Harwood Jennifer Sigler moment of clarity, it’s time to bust myths and break through the
Ben Hertzberg Ariel Silbert
bottlenecks that have held back needed change — rethinking
Marc Kelly Brian Stickles
Bryan Klein Jitendra Subramanyam
cost structure, creating more efficient and responsive projects
Elyssa Klett Ben Szuhaj and processes, and considering larger social impacts.
Jessica Knight Carolina Valencia The core group of articles in this edition deliver new ways to
Jamie Kohn Anna Maria Virzi shift your mindset and take action now. They are based on best-
Jessica Kranish Peter Young
Eliza Krigman Farhod Yuldashev
practices research and real-world experience shared by global
Kaelyn Lowmaster Dian Zhang leaders at organizations large and small, including Google, ING,
Oana Lupu Lloyds Banking Group, Qantas, ZO Skin Health, the Treasury Board
of Canada Secretariat and the Finnish city of Turku.
Project Managers Cindy Zhang, Dian Zhang You can use this information to spend more prudently while also
positioning for recovery. Decisions made during this period of
R&A Creative uncertainty will forge a new set of winners, just as they did in the
Art Director Mike Jurka wake of the financial crisis. This time, fresh thinking will aid in
Senior Designers Divya Malkani, Nicole Daniels steering through the “new normal” and beyond.
Editor Chuck Myron
GBQ also includes departments that keep you up to speed:
Cutting Edge, a graphics-intensive look at thought-provoking
new data, and Briefs, a set of short takes about Smarter Spending
& Planning, Talent & Culture, Growth & Innovation and Data
& Technology.
© 2020 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered
trademark of Gartner, Inc. and its affiliates. This publication may not be reproduced
We welcome your comments and questions. Please reach out to
or distributed in any form without Gartner’s prior written permission. It consists of me at judy.pasternak@gartner.com.
the opinions of Gartner’s research organization, which should not be construed as
statements of fact. While the information contained in this publication has been
obtained from sources believed to be reliable, Gartner disclaims all warranties as to the — Judy Pasternak
accuracy, completeness or adequacy of such information. Although Gartner research
may address legal and financial issues, Gartner does not provide legal or investment
advice and its research should not be construed or used as such. Your access and use
of this publication are governed by Gartner’s Usage Policy. Gartner prides itself on its
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Table of Contents
Departments Top Story
5 The Cutting Edge 3Q20 10 Lasting Redeployment Lessons

From the COVID-19 Crisis
Cool new data points:
Out of necessity, companies have
• New markets are not a priority in 2021
discovered just how dynamic their internal
• The supply chain pendulum swings from talent pool is. Businesses have long wanted
efficiency to resilience to make better and more creative use of their
• Help vulnerable customers and in-house labor market, as automation takes
they will help you: a lesson from hold and skills needs shift, but inertia to stay
in silos is strong. Now that the pandemic
financial services
has ripped apart the seams of resistance,
• Returning to work: the end is not the end companies should capitalize on what worked
and prepare for more staff redeployment.
68 Briefs
Quick takes on fresh research:
Feature Articles
• Smarter Spending & Planning
– To deliver cost savings, carrots 16 Prioritize Spending That
are as crucial as sticks Differentiates Your Company
– Fast-track support for critical Stop overweighting the importance of
suppliers in distress adapting to the external environment —
that’s equivalent to outsourcing your resource
• Talent & Culture allocation strategy to your rivals and the
– How to unlock employee macro economy. Instead, finance and
responsiveness business leaders should work together and
spot where they can invest in standing out
– Mental health offerings can from the pack.
boost engagement
22 Smarter Design Will Insulate
• Growth & Innovation Your Biggest Bets From Upheaval
– R&D leaders look one step ahead The structure of growth projects puts
– The art of the virtual sales pitch long-term success at risk. Saying “these
are important” is not the answer because
• Data & Technology everyone agrees yet tough choices are at
hand. There’s a better way to encourage
– 4 enforcement priorities for
sustainable funding: reduce the resources
California’s new privacy law
required, eliminate conflicts between
– Data scientists are hiding initiatives and the core business, and consider
in plain sight the sequence to keep funding flowing.
3Q20 3
© 2020 Gartner, Inc. and/or its affiliates. All rights reserved.
Table of Contents
Feature Articles
27 How One CFO Is Laying the Foundation 44 Mass-Produced Personal

for Postpandemic Growth Compliance Guidance
The COVID-19 crisis provides an opportunity Few compliance teams have time or
for functional leaders to test emerging money to create tailored guidance that
business models and create pathways to addresses needs as they arise. QBE North
efficient growth. One CFO describes his America found the solution in a library of
decision making, which aligns with our modules that can be assembled many ways.
framework for considering investments Employees receive only what applies to
to prioritize and which to scale back. them, so requirements feel fully customized.
30 The Pandemic, Protests and a 50 Because Every Hire Counts, Recruiting

Test of Corporate Commitment Processes Must Shift in 3 Ways
The economic downturn is no excuse for Conventional recruiting methods no longer
shelving promises to employees, consumers yield the high-quality talent needed to
and suppliers. A public health crisis and sustain growth. Business leaders must seek
a focus on racism make it crucial to keep skills over profiles, consider more diverse
those pledges. General counsel should talent pools and adapt jobs to changing
ask the board four questions to frame candidate expectations.
directors’ thinking. 57 Decision-Making Principles Drive Quality
34 The Next Step for Forging Trust in AI and Efficiency Through Disruption
Google, Canada’s Treasury Board Favoring speed over high standards, or now
Secretariat and Axon are bridging the gap over later, presents a false dichotomy. Be
between abstract ethics frameworks and clear upfront about how to weigh choices
the practical work of product development. so employees, whether they are on the front
They describe how legal leaders and line or within a specific function, understand
AI product developers use a structured what to do. That’s more important than
process to assess the impact of algorithms. messaging or spotting issues early.
40 As Demand Soars for Pandemic 63 Applying Agile Methods Outside IT

Analytics, Chief Data Officers Internal audit, HR and communications
Need a Business Mindset teams are making use of Scrum Masters,
It’s time to dispense with the notion that data Kanban boards and stand-up meetings –
and analytics teams only respond to business and reaping the benefits.
needs or that D&A is just a support service
rather than an enterprise competency. Chief
data officers who actively advise on corporate
strategy double their odds of generating
consistent business value.
4 Gartner Business Quarterly

The Cutting
Edge: 3Q20
Cool New Data Points
Compiled by Oana Lupu
New Markets Are Not a Priority for 2021

Almost four-fifths (79%) of chief marketing officers say their companies plan to
focus next year’s growth strategy on existing markets — either by increasing sales
of existing products there or introducing new products.
How CMOs Plan to Fuel Growth in 2021
Increasing Sales Through Strategic

of Existing Partnerships With
34%
Products to an Other Firms to Gain
Existing Market 36%
Access to Each
Partner's Distribution
Channels or Brand
Introducing New
Products to an 45%
Existing Market
Create a New
Product That Better
32%
Entering a Meets the Need of
New Market the Existing Market
14%
Using Existing
Products
By Investing in R&D
Entering a New to Develop New
32%
Market With the Products to Cater to
6%
Introduction of the Existing Market
New Products
0% 25% 50% 0% 25% 50%

n = 432 marketing leaders n = 195 marketing leaders focused on introducing
Q: What is your organization's primary strategy to fuel new products to an existing market
growth into 2021? Q: What is the primary way your organization plans
Source: 2020 Gartner CMO Spend Survey to approach new product development to fuel
Note: Numbers do not add up to 100% due to rounding. growth in 2021?
Source: 2020 Gartner CMO Spend Survey
3Q20 5
The Cutting Edge
The Supply Chain Pendulum Swings From Efficiency

to Resilience
The COVID-19 pandemic has exposed the weaknesses of global supply chains
built around cost and efficiency. Executives used to think that building a highly
resilient network was simply unaffordable but this crisis has made the ability to
respond to change an urgent priority.
Expected Increase in Supply Chain Resilience

Status today Status likely in 2-3 years' time
62
55
38
21
14
3
Highly Resilient Moderately Resilient Not Resilient
n = 236
Q: How resilient do you believe your supply chain network is, in terms of its ability to respond
effectively to changes in trading conditions?
Source: 2020 Gartner's Weathering the Supply Chain Storm Survey
Note: Don't know responses are excluded.
A highly resilient network is one with good visibility into the supply chain and the agility
to shift sourcing, manufacturing and distribution activities around rapidly.
Supply chain executives told us they are pursuing these strategies:

• Building up inventory and increasing production capacity
• Relocating manufacturing plants to reduce dependence on any particular country
• Mapping sub-tier supplier interdependencies to avoid overdependence on any particular supplier
• Moving manufacturing or assembly operations closer to the customer
• Standardizing parts and plants so that products can move seamlessly across the network
• Building partnerships with contract manufacturers and logistics providers to diversify the network
and plan joint crisis-response measures
Source: Gartner

The Cutting Edge
Help Vulnerable Customers, and They Will Help You:

A Lesson From Financial Services
About half of retail banking consumers and small businesses are financially
vulnerable, and they come from all income levels. Don’t make assumptions
— use analytics to identify who they are and focus groups to understand how
you can address their challenges.
47% of retail banking 74% of the financially 25% of the financially 22% of wealth
customers are vulnerable are vulnerable have an management customers
financially vulnerable. employed. income of over $100k. are financially
vulnerable.
Source: 2020 Gartner Customer Experience Survey
Financial services providers that invest in empowering at-risk customers see positive returns for the
customer and themselves. When a bank teaches these clients about options, gives them tools to stay on
track and makes it easy to access new services, they are more likely to take a positive action with their
provider — for example, generating revenue by increasing their savings or becoming brand advocates.
Financial Empowerment Actions and Their Effect on Customer Relationships

Percentage of Retail Customers, Global
Positive Customer Action with Provider
Negative Customer Action with Provider
100%
100%
Percent Likelihood of Customers
50%
50%
0%
0%
Low Medium High
Level of Financial Empowerment
n = 5,337 Retail; 729 Wealth; 1,499 Small Business
Source: 2020 Gartner Customer Experience Survey
3Q20 7
The Cutting Edge
Returning to the Workplace: The End Is Not the End

Companies that have brought employees back to the workplace say that the big
move is just the start of an iterative process. The return is fraught with risks including
the potential for employees to get sick or even the need to go remote again if public
health indicators such as new cases, hospitalizations or deaths increase.
To sense and respond faster, and to learn lessons as you go, continually monitor five dimensions:
Workforce Workforce Health Protocol Business External

Sentiment & Behavior Effectiveness Need Trends
Questions to Monitor
• Do employees • Is the workforce • Do protocols • Are we meeting • Are cases

feel safe? healthy? comply with business need increasing/
• Are employees • Are there applicable law? in our current decreasing in
engaged specific areas • Are employees approach? the area?
and productive? of risk (team, engaged and • What is the
• How has floor, office)? productive? current CDC
company • Is the workforce recommendation?
culture following safety • Are there
changed? protocol? changes to
stay at home
regulations?
Potential Data Sources
• Pulse surveys • Self certification • Location • Business • CDC website

• Engagement • Temperature certification demand • State/
surveys check results • Regulatory • Time to delivery local health
• Focus groups • Leave usage tracking • Backlog department
• Offsite • Social distance • Protocol audits
attendance monitoring • Employee
• Leave usage • Location feedback
badging
Enterprise risk management leaders are:

• Helping identify someone in charge of the company response plan, a “risk owner”
• Monitoring whether the level of risk of reopening is changing
• Reporting risks related to reopening to the executive risk committee and the board of directors
n = 63 assurance leaders
Source: 2020 Gartner Q2 Emerging Risks Survey

Returning
to the
Workplace?
Plan effectively for bringing your
employees back to work and identify
the critical steps that your team
should consider with our guide.
• Which employees Includes Return to

should come back, Work Checklists for:
and when? • Corporate Real Estate
• What does a “return” • Legal & Compliance
to the workplace
• Finance
look like?
• Privacy
• Who should be part
of the return-to-work • Human Resources
team? • Risk Management
Prepare a smooth transition

for your employees. Visit:
gartner.com/en/insights/an-executive-
guide-to-returning-to-the-workplace
© 2020 Gartner, Inc. and/or its affiliates.

All rights reserved. CM_GBS_988318
Lasting
Redeployment
Lessons From the
COVID-19 Crisis
by Eliza Krigman, Kaelyn Lowmaster
and Sara Clark
with contributors Reuben Harwood and Elyssa Klett
Out of necessity, companies have discovered just how dynamic their internal
talent pool is. Businesses have long wanted to make better and more creative use
of their in-house labor market as automation takes hold and skills needs shift. But
they have struggled to execute on it — the inertia to stay in silos is strong.
Now that the pandemic has ripped apart the

seams of resistance, companies should capitalize The CAO already had a talent profile
on what worked and prepare themselves for of the internal audit team, which
more redeployment.
helped him map skills, abilities and
The sudden lockdown and recession caused experience to business needs and
by the outbreak pushed companies to shift
requests for support. It also helped
employees around in unexpected ways.
Internal auditors helped finance track cash that contacts in the business were
flow and support IT in the transition to remote requesting specific people they had
work, HR recruiters staffed the company’s worked with before.
hotline, sales personnel offered customer care,

Figure 1. Talent Strategies in Response to COVID-19/Economy
Percentage of HR Leaders
Currently Considering Not Considering I Don’t

Using Using Using Know
Redeploying Staff to Other

Parts of the Business
58% 17% 20% 5%
Upskilling Talent 42% 37% 16% 4%
Redesigning Roles to Free Up Capacity for

Talent to Work on Fixed-Term Projects Inside 25% 32% 31% 11%
and Outside the Business Unit
Creating Rotational Programs to Fill

Immediate Talent Needs 22% 22% 44% 11%
Centralizing Pools of Talent to Work on

Projects Across the Business 27% 27% 26% 19%
Hiring More Contingent Labor 15% 21% 57% 7%
Sharing Talent With Another Organization

External to Our Own
11% 8% 68% 13%
0% 50% 100%
n = 99
Source: 2020 Gartner Talent Strategy and Budget Shifts Quick Poll
Note: Percentages may not add up to 100% due to rounding.
marketing gave support to account managers, The virus’s impact on the way we work — or don’t
and the list goes on. These represent just — along with the ongoing shift to digital business
some of the extraordinary redeployment tales initiatives will require more internal mobility. To
shared with us this year. It’s become the norm. make it work well, company leaders need to create:
Nearly 60% of organizations have moved talent
• A culture of redeployment
to other parts of the business, according
to our May Talent Strategy and Budget • Dynamic systems to manage organizational
Shifts Quick Poll. skills from both the supply and demand sides
3Q20 11
Create a Culture of Redeployment When the CAO approached his staff about the
Organizations with successful redeployment sudden change, he explained that he would
efforts involve a broad ecosystem of prefer to ask everyone what they were interested
stakeholders. Traditional leaders in this space, in and where they would like to go, but that the
such as talent management as well as learning crisis necessitated some “top-down” decision
and development, should offer guidance making. To do what’s best for the business
and support as needed; they must also avoid meant that employees didn’t “have a choice or
becoming a bottleneck. Active engagement from a voice right now,” he said. The CAO emailed
senior leadership, managers and employees is the assignments on that first evening and told
essential, whether it’s for a short-term project everyone that a more detailed discussion would
or a long-term realignment of personnel. Each be on the agenda at their team meeting early the
of these constituencies has a different set of next morning.
responsibilities: Broadly speaking, the CAO received positive
• Senior leaders decide on and feedback. Some employees had tough
oversee strategy questions about whether it would be better
if a few people should stay back to “keep the
• Managers accept and actively engage internal
lights on” at the internal audit function; some
talent transitioning from elsewhere
asked what would happen to their projects. The
• Employees seek clarity and support to remain CAO’s response: “It’s not time for half-measures.
productive throughout transition Let’s go all-in.”
With the business facing severe disruption,
Internal Audit at One Company Turned on a
the CAO was actually able to provide more
Dime to Staff Other Teams During the Crisis
“clarity and certainty” about the redeployment
The internal audit department at a consumer plan than about the schedule for the
products company redeployed all 25 members “internal audit plan.”
on a single day in March off the back of quick
cooperation between staff, management and An important part of that process was
top brass. When it became clear that travel “setting clear expectations for the team
restrictions and resistance from the business about what this means,” the CAO told us,
would make the second quarter audit plan by offering clarity to employees about who
impossible to conduct, the chief audit officer their assignment line manager would be and
(CAO) proposed to the CFO that the team help the timeline, in this case three months. It
other parts of the company. also meant confirming three people — the
employee’s internal audit line manager, the
The CFO was happy and acted fast — clearing
assignment line manager and the employee —
the proposal with the audit committee chair and
understood the objectives and commitments
asking finance leaders that morning to reach
for that time period.
out if they could use help. Casual conversations
with other executives in the office that day “Don’t go in with the auditor mentality,”
identified more areas where internal audit the CAO told the team. “Go and learn.” He
could contribute. emphasized that team members should build
trust and credibility at the start by “getting
By that evening, assignments were ready, mostly
the brief and delivering the brief” for their first
in finance areas to support the increased focus
assigned tasks.
on cash management in the early days of the
outbreak. The CAO already had a talent profile of The internal audit staff stayed connected during
the internal audit team, which helped him map their rotations with a virtual campfire, charades
skills, abilities and experience to business needs and a happy hour featuring a pub quiz. During an
and requests for support. It also helped that online team meeting, the auditors talked about
contacts in the business were requesting specific what they had been doing and where they had
people they had worked with before. been redeployed.

Blue Shield of California’s Top displaced employees as part of an ongoing
Managers Rolled Out a “Talent Bridge” dialogue around organizational transformation.
for Long-Term Reassignments
The chief human resources officer and other senior
Engagement and communication from leaders then began to share early Talent Bridge
leadership is just as, if not more, important success stories in regular all-company manager
in long-term reassignment of personnel. To meetings. In turn, those managers led education
prepare for the rollout of its Talent Bridge sessions with their teams and provided resources
redeployment program, Blue Shield of
about the program. Finally, the members of those
California, a healthcare insurance nonprofit,
teams completed regular training on Talent Bridge
executed a series of integrated education and
specifically and on broader issues related to
communication initiatives at all levels of the
organization. workforce development. The training was designed
to help them understand the full context for
Blue Shield developed Talent Bridge to help pursuing redeployment and the benefits it might
employees throughout the organization find
have for their careers.
new roles when they are displaced by workplace
changes, such as digital transformation. As a result, all stakeholders were equipped with
The CEO got the rollout started, announcing the necessary resources to fully participate in the
redeployment as the default option for all Talent Bridge process (see Figure 2).
Figure 2. Senior-Level Engagement and Integrated Action to Instill Commitment to Redeployment
Announce Talent Bridge as part of ongoing

CEO
dialogue around reshaping work.
Integrated Action to Prioritize Redeployment
Publicize Talent Bridge success stories while

C-Suite
leading regular all-manager meetings.
Conduct Talent Bridge educational sessions

Managers
and communicate openly with teams.
Complete online training on

Employees workforce of the future and Talent
Bridge support features.
Source: Adapted From Blue Shield of California
3Q20 13
Better Skills Management: Gaining Visibility Dynamic Skills Management
Into Supply and Identifying Demand To create a more dynamic way to manage
Moving talent internally involves a juggling act: organizational capabilities, consider creating
identifying available skills, talent needs and a skills-sensing network. Under this system,
matching the two sides in real time. There are HR coordinates a group of cross-organizational
a lot of ways to obtain the relevant information, stakeholders with the purpose of identifying,
and organizations must find the method that addressing and monitoring enterprise skills.
suits them best. Network membership changes to fit strategic
Gaining Better Visibility Into Internal Skills needs, embraces ambiguity, prioritizes action
over perfection and frees up HR to move fast
When asked what made it possible to redeploy on the things it knows and can anticipate.
staff quickly, several leaders told us that a skills
inventory proved to be an indispensable tool To figure out who should be in this network,
and that a lack of one can be a barrier. Some consider the following questions:
organizations already had one and others • Who can offer expertise?
created one quickly. • Who should be included early?
While an inventory can be useful, leading • Who will be most affected by this skills change?
companies are moving toward a more
responsive system to manage the supply • Who will be responsible for funding reskilling
and demand of skills. Schlumberger, a or redeployment solutions?
Paris-based oil and gas company with • Who would sense change in skills needs first?
more than 100,000 employees, created a
• Who stands to benefit?
career portfolio “backpack” for all staff. It
encompasses who employees are, what they Fundamentally, this is about sharing
know, where they have been and the support responsibility for skills management throughout
they have available to them. The six elements the organization. For example, a network
of the career portfolio are competencies, member from a business unit brings local
behaviors, exposure, experiences, personal knowledge of skills supply and demand, and
brand and network. HR members can contextualize this information
The career portfolio backpacks are updated using their knowledge of global talent strategy
on a regular basis and, figuratively speaking, and expertise in HR best practices.
travel with employees throughout their To remain nimble, it’s not necessary to involve
careers at Schlumberger. The backpacks are every viewpoint at every step. Different
accessible through the company’s online career combinations of the network keep the strategy
platform. To lower the burden of collecting the flexible enough to respond to business needs at
information, some of it is automatically fed into the pace of change (see Figure 3).
a website that employees and managers can
access and update. Lloyds Banking Group leverages a cross-HR team
that partners with business unit representatives
The details come from common documents to sense new requirements in real time and
like internal résumés and performance reviews, builds in opportunities to course-correct.
but also more novel sources, like calendars, Members of the cross-HR team meet weekly,
coaching data and mentoring conversations. monthly and annually with relevant stakeholders
Employees can make updates themselves but, to revisit and adjust their plans, enabling
to prevent misrepresentation, managers have the workforce to maintain focus on meeting
approval rights and can also edit information the actual — not predicted — needs of the
about a direct report. organization.
A major benefit: The backpack creates
transparency about employee skills, making it Matching Skills to Needs
easier to fill critical roles and help direct staff Ways to reallocate talent run the gamut from
to capability needs. informal conversations, such as the ones the

Figure 3. Flexible Network Members for Identifying and Addressing Skills
Illustrative
Line Recruiting Line Recruiting

Leaders Leaders
D&I D&I
Operations Operations
L&D L&D
Strategy IT Strategy IT
Talent Compensation Talent Compensation

Management and Benefits Management and Benefits
Strategic
Identify Skills Address Skills Needs
Goal
Typical • Identify trends in business skills needs. • Adapt existing learning content to
Outputs • Track market supply of in-demand current need.
skills. • Create hybrid build, buy and borrow
• Find underutilized pockets of skills. solutions.
• Leverage skill adjacencies to quickly
pivot skill sets.
Source: Gartner
management team at the consumer goods whether anyone should be redeployed based
company had when the pandemic hit, to systems on changing needs and priorities, even if it’s
that reveal matches, such as the skills-sensing before the employee’s current assignment has
network at Lloyds Banking Group. been completed.
At Qantas, HR uses a combination of internal HR advertises its planned projects internally
marketing and leadership insight to pair skills to pools of the function’s available staff,
to the function’s needs. This helps the company highlighting the combination of skills
move HR talent so that the initiatives that are top and capabilities the team will need.
priority at any given time receive the skills they The organization relies on a mix of
need when they need it. candidate applications and HR leadership
HR leadership, along with business partners, recommendations to match employee skill sets
assess the importance of projects at a monthly with project requirements.
staff meeting to decide where to distribute Over a two-year span, HR doubled stakeholder
resources. During that meeting, leaders discuss satisfaction.
3Q20 15
Prioritize
Spending That
Differentiates
Your Company
by Jason Boldt and Jessica Kranish
Over the past decade, less than one-third of companies earned returns on
invested resources above the cost of capital. The problem is not growth —
companies have added 25% to sales since 2010.1 The problem is what the growth
costs — companies have become increasingly less profitable, incurring higher
operating costs as they expand. They have also spent more to gain incremental
sales, driving down reinvestment efficiency (see Figure 1).
Figure 1. Performance on Growth, Profitability, and Investment Efficiency

Change from 2010-2018 Indexed to 100, S&P Global 1200
Reinvestment
Growth
Efficiency
p 25%
q 8% Long-Term
Value
Profit Margins
q 1%
n = 1,142 global companies
Source: S&P Capital IQ
Note: Reinvestment efficiency is sales divided by invested capital, profit margins are earnings before interest and
taxes divided by revenue, growth is revenue growth.

A Period of High Change Makes Getting When you add in an unexpected event like
the Most for Your Money Even Harder a pandemic — which, for some industries,
Allocating capital among a diverse set of required immediate changes and cost-saving
stakeholders with competing priorities is efforts — managing these competing aims
extremely difficult. Companies pursue growth, becomes impossible.
profitability and reinvestment efficiency, but
Efforts to Adapt Will Have You Running in Circles
different groups have different ways of doing this
(see Figure 2). Most companies are tempted to adjust their
investment decisions based on factors like
When it comes to growth, for instance, business
competitor capabilities, addressable markets and
leaders define their business’s strategy and
industry growth rates. Essentially, they outsource
identify opportunities, while functional leaders
their strategic thinking to peers, industry trends
deliver services to support these plans. The CEO,
and macroeconomic forces.
the CFO and top executives — each contribute
to these three objectives in different ways — It does make sense to be conscious of industry
and these roles and activities are all linked, disruption, new technologies, geopolitical
meaning investing or cutting in one place will shifts and the seismic shock of COVID-19. But
reverberate elsewhere. overweighting the importance of external events
is disastrous; it has no impact on your ability to
For example, one chief information security
create value as an organization, according to our
officer told us, “It’s cuts to the infrastructure and
interviews with hundreds of CFOs in the past year
applications organization that I’m very worried
and data on their corporate performance.
about. I’m very dependent on those groups. As
they reduce their spend, and make cuts to staff When winds of change reach gale force,
and contractors, that makes them less available executives who are overly adaptive end up
and creates more bottlenecks to what we’re running in circles as they sense and respond
trying to do.” and try to absorb information. And trying to
Figure 2. Long-Term Value Realization Role Clarity and Interdependencies

Illustrative
Reinvestment
Growth Profit Margins
Efficiency
Define growth strategy Set priorities for Drive execution
CEO
for addressable markets spending budgets across the business
Define business strategy Deliver contribution Utilize investment
P&L Owners and identify growth and gross margin to deliver growth
opportunities
Set and monitor growth Set margin structure Prioritize deployment

CFO
targets and govern spending of growth investment
Functional Deliver services to Deliver operating Deliver services to

Leaders support growth margin support execution
Source: Gartner
3Q20 17
match what your competitors are doing won’t Leading CFOs concentrate on:
help: At best, you’ll equal their results, not • Aligning assets to differentiating
surpass them. opportunities. This involves assets both
The resulting vicious cycle leads your company tangible (like access to patents and
to risk getting left behind. technology) or intangible (their company’s
brand or employee value proposition). They
Spending on Differentiation Drives a 42% help build a foundation from which their
Higher Chance of Achieving Returns companies can capture growth opportunities.
Forward-looking executives have weathered • Creating differentiating capabilities. They
the pandemic and stayed the course. They don’t seek to develop where competitors
disproportionately invest to create and enable are stronger; they seek to boost capacity
points of differentiation and secure strong and ability that a rival would struggle with or
internal management alignment. These fail to build.
executives drive a 42% higher probability of long-
term value realization, worth an average of 6 • Securing strong management alignment on
percentage points of excess return beyond peers spending on differentiators. When costs are
(see Figure 3). highly interdependent, companies can more
effectively invest in what makes them stand out
when all managers — midlevel and senior —
Figure 3. Impact of Cost Structure understand which costs they need to protect.
on Long-Term Value Realizationa Investing in these areas means the business
Relative Impact of Moving from
doesn’t have to scramble to react to changes in
10th to 90th Percentile
the external environment as they occur. Instead,
42% the company can stay focused on spending to
stand out from the pack.
All business and functional leaders have a role to
play here. The entire management team needs
Superior performance to view budgets through a lens of differentiation
at differentiating the to make this work.
cost structure drives
How Verizon and Allianz Life Overcame
42% higher long-term
Two Barriers
value realization,
resulting in a 6-point Companies that pursue differentiated investing will
return premium over face two barriers: getting the organization to act
peers. together and uncovering the operational constraints
that prevent initiatives from being successful.
To jump the first hurdle, the business at Verizon
helped finance understand links between
0% spending to prevent budget changes that could
Adaptive Differentiating inadvertently hurt a point of differentiation.
As a starting point, finance used a scorecard
n = 55 CFOs to determine which costs are most complex.
Source: Gartner CFO Cost Structure Survey Questions include:
a
Long-term value realization is a measure of an
organization’s ability to realize value over a 3-year • Is the cost incurred or shared
period: expanding margins as much as possible, fully throughout the company?
translating growth bets into profitability, taking on • Does the cost create a point of differentiation?
enough risk, creating capacity to pursue growth
opportunities, and pursuing growth without creating • Do changes in the cost category affect or rely
excess complexity. on other costs?

Figure 4. Expertise Needs Assessment for Complex Costs
Illustrative
Strategic Operational Financial Process Design
Expertise How costs How costs support How costs impact How processes
Needs affect points of customer and margin and interact across
differentiation or stakeholder needs financial strategy the organization
functional value
Skills • Influence • Customer and • Financial • Design thinking

• Credibility stakeholder modeling • Six Sigma/Lean
• Strategic thinking insight • Project • Process
• Resource management reengineering
allocation
Potential • Senior business • Operational or • Senior finance • Certified experts

Roles or functional functional budget staff in functions or
leader holder • Business the business
• HIPOs embedded
finance
Responsibility Own the cost Determine how to Govern process Provide expert
category implement changes to ensure positive support and
and develop cost and develop cost impact on margin generate ideas
optimization optimization
strategies strategies
Source: Adapted from Verizon
With that information in hand, finance then The Result for Verizon
considered types of expertise needed to Two years into its four-year, $10 billion initiative,
optimize the most complex costs, using the Verizon has achieved $5.7 billion in cumulative
framework in Figure 4. cost savings. The finance team also now is able
Rather than making decisions itself or walking to spend more time making sure costs drive
business leaders step-by-step through the strategy, and the decision-making process on
process to reduce costs, finance confined its reinvesting resources got faster, too.
role to offering targeted financial guidance Finance-business collaboration is also critical
to business and functional leaders when they for addressing the challenge of uncovering the
needed it. It was the business leaders who operational constraints that limit success.
determined where to invest or cut based on Allianz Life had to determine exactly where
points of differentiation. This meant those with operational limits would erode the effectiveness
the best specific knowledge about a particular of allocations, because overinvesting reduces
cost made the decisions that affected it. shareholder returns and leads to less efficient
Finance promoted collaboration by facilitating reinvestment, while underinvesting means
the sharing of best practices among cost owners competitors can more easily copy what you’re
and encouraging adoption of successful past doing, negating any advantage.
strategies. Meanwhile, finance made changes This is a contrast to the typical way of doing
internally, too, protecting costs that drove points things. Rather than justify their proposed costs
of differentiation. against external benchmarks, business leaders
3Q20 19
helped finance understand the upper and lower business can productively spend on each
bounds of spending involved with a particular initiative. This way, the company can make the
initiative. For instance, how low can spending right decisions about how to invest.
drop before you won’t be able to achieve what
you need to? And what’s the most you can spend The Result for Allianz Life
to reach a point where if you spend $1 more, it’s Allianz Life increased its investment in strategic
wasted money? points of differentiation at greater levels
Allianz Life answered these questions with the each year while simultaneously decreasing
“Rule of 10s.” Finance posed two questions to its spending in areas that didn’t help the
executives: What would happen to a project company stand out.
if you could only spend 10% of the budgeted
amount — and what would happen if you could 1
S&P Capital IQ (financial data), Aswath Damodaran at New
spend 10 times what you were allocated (see York University (cost of capital data). Figure calculated
Figure 5)? When business leaders are realistic from the percentage of S&P Global 1200 earning return
about the constraints they face, this process on invested capital (ROIC) greater than industry weighted
can pinpoint the minimum and maximum the cost of capital (WACC), 2010-2018.
Figure 5. Rule of 10s Cost Assumption Testing

Differentiating Project A
What if you only had 1x – What if you had

10% 90% Proposed 2x 10x
to spend… Funding to spend…
Breaking Point Maximum Productive Funding
“We can still do the proof-of-concept “We’d be able to release two

at 90%. Any lower than that, and additional products. The
we wouldn’t be able to validate overall market can’t absorb
customer adoption rates….” more in the short-term…”
Business
Leader
Lower Bound: Upper Bound:

Breaking Point Maximum Productive Funding
Factor 90% 2x
Business-Identified Cost Proof-of-concept marketing Product development
Operational Constraint Adoption rate Market capacity
Source: Adapted From Allianz Life

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Smarter Design Will

Insulate Your Big
Bets from Upheaval
by Marc Kelly
As companies wrestle with a post-COVID-19 reality, boardrooms buzz with

discussions about how best to build toward future growth.
Many undoubtedly will congratulate themselves recently — regardless of quality — will do little
on the tough choices made these past few to boost companies’ long-term prospects.
months. Nearly three-fourths of companies While executives have done the hard work of
(see Figure 1) have worked to reprioritize, reallocating investment, the very structure of
shrink and delay long-term investments to their long-term initiatives puts long-term success
provide the flexibility needed to seize new at risk. What’s worse is that in many cases, these
opportunities after the pandemic. Unfortunately, companies didn’t have to cut as many initiatives
most of the difficult resourcing decisions made as they first believed.
Figure 1. CFOs’ Changes to Long-Term Growth Investments Since the COVID-19 Crisis
Percentage of Respondents Outbreak
Selectively Suspending 50%
No Changes 30%
Suspending Most or All 15%
Replacing Previous Investments

With New Investments 5%
0% 25% 50%
n = 169
Source: 2020 Gartner CFO COVID Forum

Without significant adjustment to the design needs of this new crop of growth initiatives are
of long-term initiatives, the average $10 billion poorly understood. The result: overinvestment in
company can expect to lose out on up to $100 some areas and underinvestment in others — in
million in annual revenue compared to best- turn leading to delays as initiative owners must
in-class firms. seek more resources while facing scrutiny for
waste elsewhere.
New Headwinds Put Resourcing
for Initiatives at Risk At the same time, early lessons from projects
are far more likely to prompt greater and more
Resourcing long-term initiatives has long been frequent adjustments to initiative designs,
challenging, regardless of market conditions. which can quickly invalidate careful planning
Whether from undue risk aversion or short-term and critical cross-enterprise coordination.
business pressures, “strategic” initiatives always
Highly complex team structures and competing
seem to be first for the chopping block and last
priorities prevent the business from meeting the
to be restarted.
needs of both current and long-term objectives.
Only through strong guidance and the tireless In total, these headwinds create significant drag
effort of executive champions and strategy as initiatives try to get off the ground and speed
leaders were these initiatives able to cut through toward results.
the headwinds blunting forward progress.
Poorly Resourcing Long-Term Initiatives Will
Over the last two to three years, however, new
Cost Your Company Money
difficulties emerged (see Figure 2). Long-term
initiatives have transformed into more ambitious It’s unsurprising, then, that most companies say
redesigns of core businesses, leading to long-term initiatives don’t get the money, staff
greater complexity in areas that lie outside prior and/or attention they need to succeed. Poorly
market experience. resourcing the portfolio comes at a steep cost in
the form of missing critical objectives.
For a whole host of reasons, this change
makes initiatives much harder to staff, secure An in-depth analysis of over 100 companies’
capabilities for and fund throughout their lives. long-term portfolios shows that for firms that
Strategy leaders have told us that the resourcing poorly resource their initiatives, complete
Figure 2. Factors Increasing Resourcing Difficulty
Inadequate Initiative Resourcing Adequate
Long-Standing Headwinds Emerging Headwinds
Executive
Bias Contextual
Pressure Initiative
• Risk Aversion
Ambition Initiative
• Short- • Shareholder
Unfamiliarity Initiative
Termism Activism Increased
Interconnectivity
• Siloed • Macrouncertainty Complexity Bets Lie Far
and Size of Outside New, Difficult
Thinking
Long-Term Experience Demands
Bets Base on Current
Capabilities
Source: Adapted from Dell
3Q20 23
Figure 3. Impact of Resourcing on Achievement of Initiatives’ Objectives
100%
Percentage of Initiatives Fully
75%
Achieving Objectives
55%
50%
0%
Bottom Quartile Top Quartile
Adequate Resourcing of Initiatives
n = 131
Source: 2020 Gartner Strategy Long-Term Initiative Resourcing Survey
Note: The difference in the percentage of long-term initiatives fully achieving their financial and strategic objectives
is statistically significant at a 95% confidence level. Assumptions are based on the following: a $10 billion
company with a revenue growth rate of 5% per year (the average for S&P 500 companies); a portfolio in which
75% of initiatives fully achieve their objectives; and, for initiatives that don’t, 50% of objectives are achieved.
achievement of financial and strategic objectives largely because there’s no argument to make.
is largely a coin flip. Those able to consistently Executives roundly agree their companies’
fund their projects saw the success rate go plans for expansion are vital. A more effective
up to over 75%. way to push for a consistent flow of resources
This difference isn’t small. Given the recession, is to structure the portfolio differently and
the gap between winners and losers takes on a eliminate the drag that new headwinds create
greater significance. Numerous past studies have (see Figure 4).
shown that firms unable to invest in their long- To minimize these delays, executives should:
term future during recessions leave themselves
• Design long-term initiatives to reduce the
significantly worse off in the subsequent years.1,2
resources required.
Reduce Drag to Improve the Likelihood of • Eliminate conflicts between initiatives and the
Long-Term Initiative Success core business.
When attempting to keep a growth project afloat, • Improve the sequencing of those initiatives to
executives typically try to grab the attention of reduce resource conflicts.
the business by stressing how important the
initiative is. Likewise, companies work to get Easier said, of course, than done. Limited
better at prioritizing — aiming to fuel the most visibility into effective initiative design or
critical pieces of the portfolio. In either case, execution-related issues can often prevent
the hope is that by keeping the value of these companies from even attempting to address
efforts front and center, staff and managers will drag, leaving it to be managed during execution.
make decisions and have the capacity to sustain
them — regardless of how difficult the initiative Designing More Cost-Effective
is to execute. Long-Term Initiatives
But we found no significant relationship between A lot of issues prevent initiatives from running
these tactics and the ability to draw resourcing, lean at the start. For one thing, their novelty

Figure 4. Impact of Two Approaches on Adequate Resourcing of Initiatives
40%
31%
20%
0%
0%
Drive Initiative Urgency Reduce Initiative Drag
n = 131
Source: 2020 Gartner Strategy Long-Term Initiative Resourcing Survey
Note: The graph measures the percentage of maximum improvement in adequate resourcing of initiatives as a
result of moving from 25th to 75th percentile performance of each driver. The multivariate regression model
explained 22% of the variance.
deprives leaders and their teams of meaningful execution patterns and have trouble admitting
comparisons to evaluate design or benchmark to problem areas.
performance. Invariably, team leaders will Leading firms move away from standard
overbudget in some areas (such as hiring a business cases and initiative proposals toward
data scientist instead of a software developer) more visual frameworks. These companies
and grossly underestimate in others (such as outline the connection between value and the
miscalculating the required size of the team requirements to capture that value along with
that compiles needed data banks). Lessons the necessary capabilities, assets, processes
come only through hard-earned experience, but and partners. They provide a clear, early
regardless of how well teams adapt, dealing with picture that allows for better pressure-testing
these challenges will slow them down. of key assumptions underpinning the initiative,
So, don’t wait for them to arise. Better planning enabling the company to isolate and eliminate
and tracking can go a long way. Progressive unnecessary waste.
companies have found that significant Second, these organizations use expanded
information exists within the organization to help metrics to assess underlying initiative health
improve design. It’s just trapped. measures that better indicate likely causes of
initiative failure. And they set up a reporting
To unlock it, companies must do more than just
process that rewards candor.
bringing people together to talk. Address the
root causes of how the details got stuck in the Eliminating Conflicts Between the Initiative
first place. and the Operating Model
For stakeholders and executive leaders trying Nearly two-thirds of 120 strategic initiative
to provide input and pressure-test initiatives, leaders we polled in our 2020 Business Partner
past experience may not seem to apply to a Panel Survey believe their initiatives were
push into uncharted territory. And project teams significantly impeded by conflicts with the
can be culprits, too — they may be blind to company’s current operating model.
3Q20 25
Yet strategists expend a significant amount of Improving Sequencing of Initiatives to Reduce
energy on building sufficient central oversight Resource Conflicts
capacity and attention. They consider how to Regardless of the detail or deftness of early
harmonize the needs of future-focused efforts planning, new revelations will require pivots in
and how the company works on a day-to-day long-term initiatives. At each pivot, long-term
basis, the governance mechanisms, business initiatives lose precious time.
processes and procedures, org structure,
stakeholders, etc. These adjustments, however, In addition to improving initiative planning
rarely remain stable. and cross-enterprise coordination, leading
companies have also worked to improve their
The top-down approach for alleviating conflicts ability to plan for failure. These firms focus on a
has its limits. While good for predictable and number of characteristics of the pivot process.
periodic friction, orders from above are too Upfront, initiatives are rearranged to break
structured for smaller, ad hoc issues that require down more easily so resources can be more
localized response. quickly shifted. During execution, companies
For most companies, slowdowns caused by have worked to reduce the time required to
conflicts with the operating model are poorly resequence initiatives.
defined and tough to identify — so, this battle
is hard to fight in a systematic way. To better 1
“Efficient Growth–Full Research Findings”
recognize and diagnose sources of initiative 2
“Roaring Out of Recession,” Harvard Business Review.
drag, progressive strategists create a model
that concretely frames a common language for
how to discuss operating model conflicts and
evaluate potential solutions.

How One CFO Is

Laying the Foundation
for Postpandemic
Growth
by Oana Lupu
Periods of disruption offer functional leaders the opportunity to mold their

companies into efficient growth leaders.1 Organizations that made bold capital
investments during the 2008 financial crisis generated significantly higher
shareholder returns in the recovery phase compared to their peers.2
Kevin Cornett is the CFO of ZO Skin Health, revenue-generating area of the business, five
a maker of medical-grade skin care products, possible outcomes exist (see Figure 1). Compared
including over-the-counter and prescription to prepandemic levels, parts of your company
pharmaceuticals sold by dermatologists and (e.g., business units, product lines, delivery
other cosmetic physicians in more than 100 channels, etc.) will do one of the following:
countries. Over the course of his career in • Generate more revenue (rescale)
finance and management consulting, he’s seen
firsthand that the choices companies make • Generate new revenue (reinvent)
during downturns shape their trajectories for • Generate the same amount of revenue (return)
years to come. Recognizing how high the stakes • Generate less revenue (reduce)
are during the lockdown, he’s been keeping
two questions front and center when making • No longer generate revenue (retire)
decisions with the leadership team:
CFOs and their executive teams should identify
• How do we want to come out of this crisis from areas to lift or sustain, and they should consider
a market perspective? where to reduce or retire elements of the
• How can we balance the need to protect cash business. Imagining how different parts of the
and market share in the short term with the company will adapt to the postpandemic reality
need to invest for growth in the long term? can inform the strategic resource allocation
decisions CFOs make today.
This way of thinking aligns with our
postpandemic planning framework — a tool A Vision of ZO Skin Health in the New Normal
that helps executives reimagine their company’s ZO Skin Health sells its products through medical
strategic priorities for the “new normal.” For each offices and through an e-commerce site that is
3Q20 27
Figure 1. Postpandemic Planning Framework
Reopening New Normal

Lockdown with subsidies, when protectionism
legislatively trade protectionism, fades and subsidies
imposed M&As and restructurings are no longer vital
Rescale
++
Reinvent
+
Return
Baseline
Reduce
-
Retire
0
Respond Recover Renew
Source: Gartner
a partnership between ZO Skin Health and its How Picturing the Postpandemic
physicians. Cornett told us that he and his CEO Reality Helped Inform Decisions
believe that coming out of the pandemic: This process of monitoring and projecting has
• E-Commerce Revenue Will Rescale. People informed Cornett’s choices about how to balance
will continue to enjoy the convenience of survival with growth, and it’s helped him explain
online shopping, so this channel will likely the rationale behind his recommendations to the
account for a higher portion of revenue. CEO. For example, the company decided to:
The company is looking to increase online
sales in the U.S. and expand e-commerce Prioritize Investments in E-Commerce
internationally, starting with Canada. ZO Skin Health had three major IT projects
• Brick and Mortar Revenue Will Reduce planned for this year: a new website with
as a Percentage of Total Revenue. Clients improved e-commerce capabilities, a
who avoided their doctor’s office during the warehouse management system and a business
lockdown may choose to shop online more intelligence solution.
frequently. The company expects in-person New website: Because online sales are expected
sales to increase incrementally in the new to play such an important role in the new normal,
normal, but not fast enough to keep up with funding for the e-commerce project continued
the projected growth in online sales. as planned. The company is launching a new
ZO Skin Health is watching customer behavior website designed to improve reliability in
and the macroenvironment to test whether these response to higher web traffic and to support
two beliefs continue to hold true. CFOs must international expansion plans.
monitor business metrics closely, be flexible and Warehouse management system: The rollout
adapt as health and economic conditions evolve. of this system was delayed for a few months to

prevent burnout among warehouse staff, who Rightsize Staffing in Company-Owned
are adjusting to the increased volume of smaller ZO Skin Centres
packages from online orders.
ZO Skin Centres, a line of hybrid spas and
Business intelligence system: This has medical clinics, are an important part of the
been put on hold to preserve liquidity. While brand, so the company is not planning to retire
room for improvement exists, management them, even though in-person product sales will
decided current data and analysis capabilities be lower after the crisis.
are sufficient.
When these U.S. facilities closed, ZO Skin Health
Offer Free Shipping furloughed its hourly employees. This is the
only labor force reduction the company has
It may seem counterintuitive to take on new made. It let the company adjust staffing levels
costs at a time when everyone is trying to in response to the sudden drop in demand.
reduce existing ones. But Cornett believes this Hourly employees qualified for expanded
decision was essential to boosting online sales unemployment benefits provided by the federal
in the near term and supporting the rescaling government during the pandemic. But each
of e-commerce over the long term. He has location’s salaried manager is still on board —
found ways to make up for these additional the manager’s role and institutional knowledge
costs by controlling operating expenses. The will be as important in the new normal as it was
company is considering whether to make this a before the pandemic. In the meantime, managers
permanent incentive. have temporarily shifted their responsibilities
to include taking orders by phone, managing
Retain Sales Staff and Introduce Drop Shipping
curbside pickup and planning the rollout
Even though sales in doctors’ offices will likely of safety protocols for reopening when the
decrease as a percentage of total revenue in the time is right.
new normal, they will still play an important role in
generating revenue and raising brand awareness Early Evidence of Success
for the company. And Cornett realized that to Cornett said he believes the decisions made
protect as much of its share of that market as early in the crisis have laid the foundation for
possible, the company must be proactive. long-term growth. ZO Skin Health’s initially
To preserve its physician-sales rep relationships, pessimistic pandemic revenue projections have
which are crucial to the success of its business not been realized, thanks to a sharp increase in
model, ZO Skin Health decided to keep all of its online sales, the introduction of drop shipments,
sales representatives. The sales team quickly and the ability to service existing customer and
adapted to serving physicians remotely. The staff physician accounts virtually. The April launch
has been conducting calls and virtual education of a new sunscreen product exceeded pre-
webinars instead of making in-person visits. COVID-19 sales forecasts. And some physicians
The reps have also started using social media to who had previously turned down the opportunity
target patients, which has helped boost revenue. to partner with the company have opened new
accounts after competitors who laid off sales
ZO Skin Health also introduced a drop ship
reps became difficult to reach, Cornett told us.
program so that doctors don’t need to mail
products from their homes while their offices To shape the company’s path forward, ZO Skin
are closed. Taking over this responsibility had Health’s leadership team will continue to revisit
downsides for the company: The process is high- assumptions and incorporate lessons learned
touch, and warehouse workers must manage a into strategic decisions.
much higher volume of smaller packages than
they used to. But the company realized that 1
Efficient Growth Behaviors to Begin Modeling During
helping physicians maintain their businesses and the COVID-19 Downturn
free up time for patients would build loyalty and 2
Recommended Cost Optimization Strategies and
generate sales. Tools for Finance Leaders
3Q20 29
The Pandemic, Protests

and a Test of Corporate
Commitment
by Laura Cohn
with contributors Jessica Kranish, Oana Lupu,
Laura Reul, Steve Shapiro and Dian Zhang
COVID-19 and a renewed spotlight on persistent racism are putting last year’s
high-profile corporate pledges to benefit society to the test.1 Even as executives
move to keep their companies afloat by cutting costs during the downturn,
critical stakeholders say they must keep their promises to serve workers,
customers, suppliers and the greater good, in addition to shareholders.
Nearly eight in 10 (78%) consumers worldwide Since late May, mass protests against police
expect businesses “to act to protect employees brutality, set off by the death of George Floyd,
and the local community” during the expanded into a national and global discussion
pandemic, according to Edelman, the global of the daily discrimination faced by people of
communications firm.2 Investors in control of color. The debate adds new urgency to employee
nearly 25% of the $74.3 trillion in worldwide and public demands for more diversity and
assets under management are taking similar inclusion in the workplace. Employees are
stands.3 BlackRock, which had $6.5 trillion in looking for companies to uphold their stated
assets as of March, and State Street Global values, such as Best Buy’s announcement of a
Advisors, which had $2.7 trillion, have made high- task force representing varied demographics
profile recommitments to sustainable investing.4 and seniority levels to recommend ways the
In addition, a group of more than 300 other leadership and the board can address injustice.7
long-term investors who manage more than $9.2
trillion urged companies to provide emergency The call to companies on these issues, the
paid leave to workers and prioritize staff health muscle behind it and the strategic import are
and safety.5 And no wonder: Even during the clear. “The question is, will they do it — and
crisis, investing in environment social and how will they do it?” Ioannis Ioannou, associate
governance (ESG) issues has paid off. Funds that professor of strategy and entrepreneurship
focus on sustainability outperformed traditional at London Business School, said during an
funds in the first four months of the year.6 interview with us.

The GC Has the Opportunity and the Duty
to Keep ESG on the Board’s Radar What can our company do to protect our
The general counsel (GC) has a critical role employees, customers and suppliers during
to play in the answer. First, the GC has ample a crisis? Unsurprisingly, big companies are best
opportunity right now. Legal leaders tell us equipped to both manage their own survival
they are communicating with the board more and stay true to their ESG commitments. The
frequently since the coronavirus outbreak so cash position of large-enterprise companies
that their latest risk analysis gets to corporate increased over the past year. The average
directors quickly. In some cases, briefings nonfinancial company in the S&P 500 held $3.9
occur weekly or twice a week — either at billion in total cash and short-term investments
the committee level or with individual board in the first quarter of this year, according to S&P
members — and over multiple channels, Global Market Intelligence. That’s a 22% jump
including teleconference, email and ad from $3.2 billion in the first quarter of 2019.
hoc meetings. JUST Capital, a nonprofit research organization
As an advisor to the board, it’s imperative to that tracks how companies treat external
and internal stakeholders, reported that
help its members consider ESG implications
as of 1 June:
— even as they grapple with thorny issues
involving cash flow and debt. The GC should • Fifty-one percent of the largest 100 U.S.
help frame their thinking on how to keep employers had cut prices and/or allowed
sustainability in front of decision makers facing customers to defer payments.
tough choices. • Seventy percent of them have allowed
“Every moment in a crisis, there are a thousand employees to work remotely with
microdecisions you have to make,” Davia modified schedules.
Temin, president and CEO of management • Sixty-three percent have instituted health and
consultancy Temin and Company, told us. “You safety measures for customers and workers.
can make them with generosity, and generosity • Fifty-one percent have contributed to
for your stakeholders, or you can make them community relief funds.
parsimoniously.”
More than a quarter (28%) cut executive pay, a
Questions and Examples to Prime sign that leadership is willing to shoulder some
the Pump for Board Discussion of the burden (see Figure 1).
hese four questions will help GCs guide
T Revelations of insensitive treatment of
corporate directors: employees could damage an employer’s brand
• What can our company do to protect for years to come. Conversely, those that excel
our employees, customers and suppliers during this time period and demonstrate their
during a crisis? commitment to employees will be viewed as top-
tier employers for the future.
• How can we tie shifts in our corporate strategy
that result from the crisis to our sustainability “It starts with fair wages and benefits and goes
efforts? Should we be reporting metrics to safety and opportunities for inclusion,” Alison
that we’re not? Omens, JUST Capital’s chief strategy officer,
told us. “At its core, it’s how a company treats
• How can we use our company’s resources its workers.”
and capabilities to address the urgent needs
Some organizations are redeploying employees
of our community and respond to the social
whose work has slowed down rather than
environment?
resorting to layoffs. For example, internal audit
• How can we make sure that crisis teams are pivoting when travel restrictions
management efforts do not interfere with delay fieldwork. At Heineken, Global Audit
what we intend to do for our stakeholders in Manager Paul Hamaker assigned auditors to
the long term? help the business with short-term pressing
3Q20 31
Figure 1: The Response of Large U.S. Companies to COVID-19
Source: JUST Capital
projects. And at Mars, Kenny Zheng, the have communicated to set expectations and show
company’s global internal audit senior empathy about the risks of returning. Take the
manager, is using the extra time to build his morning commute. This could be a dangerous
team’s data analytics skills. moment in an employee’s day, particularly for
Similar shifts can support the supply chain as those who take public transit. To make it easier,
well as protect staff jobs. Procurement leaders companies could provide private transportation,
tell us they have asked communications and discounts for ride-sharing apps or flexible hours
marketing employees to reach out to vendors that allow employees to travel during nonpeak
in their portfolio that could benefit from times and more easily maintain social distancing.
regular contact during the crisis but are not on
procurement’s priority list. And they’ve asked How can we tie shifts in our corporate strategy
finance departments to work directly with that result from the COVID-19 crisis to our
distressed suppliers to avoid the need to pass sustainability efforts? Should we be reporting
documents back and forth. metrics that we’re not? Strategists tell us they
Even organizations that must cut or furlough are revisiting underlying assumptions, developing
workers can take steps to soften the blow. For scenarios and reprioritizing initiatives to make
instance, U.S. companies in the entertainment and their long-term plans more flexible at a time of
hospitality industries that have furloughed workers heightened health, social and economic pressure.
pledged to continue to provide health benefits to As companies work to make supply chains
their staff for several months, sometimes longer.8 more resilient and production more efficient,
And when offices get ready to reopen, companies it is an opportunity to lock in long-term ESG

goals at a moment of negotiating leverage. If
you need ideas on new areas of sustainability to How can we make sure that crisis management
focus on or metrics to report, check the list of efforts do not interfere with what we intend to
standards found in “How to Select the Right ESG
do for our stakeholders in the long term? Most
Reporting Framework."
importantly, think about how your actions will
Make this a priority. Assurance leaders tell us that look to others. For instance, public companies
the highest-velocity enterprise risks — those that that used the U.S. Treasury’s $350 billion bailout
would hit fast should they occur — are related to fund for small businesses faced a backlash from
social change or the workforce. both Congress and the public since they had
other routes to access capital.12
How can we use our company’s resources If you’re not sure about a certain crisis
and capabilities to address the urgent management strategy, check with a trusted
needs of the community and respond to the advisor such as a particular board member,
social environment? Some companies have outside counsel or someone that the CEO relies
reconfigured manufacturing operations to on, the consultant Temin told us.
produce hand sanitizer instead of beer — or face Temin also recommends applying what she calls
masks instead of apparel.9,10 the “karmic cockroach test.” It goes like this: Ask
Others have donated medical supplies to hard- yourself whether this action or statement will lead to
hit areas such as New York City. Executives reincarnation as a bug that incites disgust in others.
should ask whether their companies can afford “Somewhere deep inside,” she said, “no matter what
to donate money to help local organizations religious tradition you come from, you know you will
provide critical services. In Michigan, the Detroit come back as a cockroach if you do it.”
Pistons partnered with Wayne County and other
organizations to donate $375,000 to Forgotten 1
“Shareholder Value Is No Longer Everything, Top C.E.O.s
Harvest, a local food bank that has seen Say,” The New York Times.
increased demand during the crisis.11 2
“Edelman Trust Barometer Special Report on COVID-19
Demonstrates Essential Role of the Private Sector,” Edelman.
If you’re reducing staff, take care not to
undermine progress you may have made
3
“2018 Marked Uncertainty in Asset Management — Boston
Consulting Group,” Pensions & Investments.
on your diversity efforts. And protect your
outside parties. It’s critical to make sure each
4
“Stewardship Engagement Guidance to Companies in
stakeholder, whether it’s an employee or Response to COVID-19,” State Street Global Advisors
(registration required).
a vendor, has “an equitable opportunity to
succeed,” Jean Lee, president and CEO of the
5
“Investor Statement on Coronavirus Response,” Interfaith
Center on Corporate Responsibility, Domini Impact
Minority Corporate Counsel Association, told
Investments and the New York City Comptroller
us. “Those are the kinds of things that GCs can
really drive.”
6
“ESG Investing Shines in Market Turmoil, With Help From
Big Tech,” The Wall Street Journal (subscription required).
It’s important to listen to and fund employee 7
“Best Buy’s Corie Barry on the Aftermath of George Floyd’s
resource groups that represent segments of the Killing: ‘We will do better,’” Minneapolis/St. Paul Business
workforce such as women, veterans, or racial Journal.
and ethnic minorities. These groups offer help 8
“These 21 Prominent U.S. Businesses Are Among Those
achieving diversity and inclusion goals. Temporarily Laying Off the Most People,” USA Today.
Employee groups can also provide tips for 9
“Distilleries and Breweries Pivot to Producing Hand
supporting supplier diversity. Another resource Sanitizer,” Bloomberg Businessweek.
the company might have overlooked to bring more 10
“Brooks Brothers General Counsel Seeks Solutions in
minority firms into its network: primary vendors COVID-19 Era,” Bloomberg Law.
with owners from underrepresented groups who 11
“Pistons Owner Tom Gores Announces $375,000 Grant for
may know of others. Minority suppliers tell us Forgotten Harvest,” Detroit Free Press.
companies should also ask them for insight into 12
“Scores of U.S. Public Companies Take Small Business
diverse segments of the consumer base. Rescue Funds,” Financial Times (subscription required).
3Q20 33
The Next Step for

Forging Trust in AI
by James Crocker
with contributors Arnav Saxena and Ayush
Saxena from the social media analytics team
Artificial intelligence (AI) and machine learning technologies were already helping
organizations predict significant swaths of human life when attempts to trace
COVID-19 infection accelerated collection of citizen and employee data.
At the same time, worldwide anti-racism protests For instance, while the government of Canada was
have spawned calls for limits on the use of facial investing heavily in AI capacity, studies suggested
recognition technologies and other AI-based that only 30% of Canadians supported this means
methods of surveillance. of enhancing services. That’s according to Noel
How can governments and companies earn and Corriveau, senior counsel at INQ Data Law and
keep public trust in AI? In the absence of clear an architect of the effort to show citizens that
regulatory and policy guidance, the last five years the government was committed to addressing
have seen an explosion of ethical AI frameworks that trust deficit. The Treasury Board of Canada
and principles intended to inform decisions. While Secretariat responded, Corriveau told us, with
these are important, they aren’t enough. a directive on the use of automated decision
making (the principles) and a framework for an
The combination of sound ethical principles algorithmic impact assessment (the analysis).
with demonstrable legal analysis is necessary to
provide assurance that the technology is safe,
responsible and defensible. "It remains a huge
challenge to build a bridge between, on the
one hand, abstract, high-level ethical and legal Noel Corriveau
principles and, on the other, the practices of Senior counsel INQ Data Law,
technology development and use in particular previously special advisor on
contexts,' writes philosopher of technology Mark artificial intelligence to the
Coeckelbergh.1 This is particularly important chief information officer of
in the current context of AI technology, where Canada
ethics-washing and ethics-shopping are
becoming increasingly common.2

Similarly, Jen Gennai, Google’s head of or replace human decision making. The scope
responsible innovation, told us CEO Sundar Pichai of an AIA must be broader than other forms of
drove the company’s adoption of both artificial review that may be more familiar. For instance,
intelligence principles and governance processes a privacy impact assessment evaluates any
to check that its technology will benefit society project against privacy risk; an environmental
and won’t create or reinforce unfair bias. impact assessment evaluates a project against
environmental sustainability implications. But
an algorithmic impact assessment considers
the interplay between new technologies and
many dimensions of potential harm, including
Jen Gennai human rights, economic sustainability,
environmental sustainability, regulatory
Head of responsible risk and more.
innovation, global affairs,
Google In addition to increasing public trust and
promoting ethical behavior, an AIA can prepare
an organization for compliance with likely future
regulation for AI. It can also document decision
making to demonstrate due diligence and
reduce present and future regulatory risk and
Concerns about the ethics of AI are common.
other liability.
According to Coeckelbergh, “to assume AI is
neutral and to use it without understanding what Creating an AIA, Corriveau told us, should be
one is doing contributes [...] ultimately, to the a joint endeavor across disciplines. Lawyers
ethical corruption of the world.”1 must be involved early and throughout the
Our 2018 survey of over 4,000 consumers found development process of a new algorithm:
that the public has serious reservations about “Lawyers need to understand legal problems
the social implications of AI:3 as data problems and vice versa.” This helps
lawyers reduce risk without stifling innovation.
• Sixty-five percent think, “AI will
Besides legal, companies should consider
destroy my privacy.”
involving representatives from information
• Sixty-three percent think, “AI will destroy more security, data management, data science,
jobs than it creates.” privacy and compliance to get a fuller
• Sixty-two percent think, “Businesses will picture of risk.
use AI to their own benefit,” as opposed
to consumer benefit. AIA Tools to Aid Evaluation
• Sixty-two percent think, “AI will have a Tools to facilitate an AIA can be surprisingly
negative effect on human relationships.” simple. For instance, Axon’s Artificial
Intelligence Ethics Board developed six
• Fifty-seven percent think, “The children
questions to apply to any artificial intelligence
of today will have fewer career
product the company develops in the policing
opportunities due to AI.”
technology space.4 Axon appointed an
• Fifty-three percent think, “AI will create external board made up of subject matter
a less equal society.” experts to ensure independence from
executive pressure. The company made the
The Structured Process That Spans the Gap decision to overrepresent communities likely
Between Principles and Accountability to be affected by its use of AI to ensure that
Algorithmic impact assessments (AIAs) are perspectives representing these communities
an emerging practice that offer a structured are taken into account. The minimal question
process for evaluating the implications of any set the board developed to evaluate projects
product or service employing a set of rules, shifts emphasis to the expertise of the
usually computer-generated, that augment panel using it.
3Q20 35
A list of questions can also be more complicated. A Review Board Can Be Part of the AIA Process
Gennai said Google’s internal responsible … or Not
innovation team develops extensive question
Although both Google and Axon employ
sets that it calls patterns; these are aligned to
review boards as a part of their AIA process,
Google’s AI principles.5 Patterns are subject
to revision and addition. They are based on dedicated committees may not be required.
case study precedent, previous decisions the A more complex AIA tool can attempt to capture
company has made, the expertise of team the knowledge and judgments of experts from
members and secondary research. Their purpose a variety of different domains in a tool with
is to help team members identify ways in which a a simple user interface. After project owners
new project may contravene Google’s principles, deploy the tool, either the standard corporate
and they form an important part of the team’s compliance function or a dedicated review
assessment process (see Table 1).6 board can monitor its use.
Table 1. AI Principles Review Process
Process
Steps:
Intake Analysis Adjustment Decision
Process • Any team can Reviewers analyze • Reviewers Reviewers decide

Details: request AI the scale and recommend whether to pursue
principles advice. severity of a technical the AI application
• Responsible technology’s evaluations and under review.
innovation potential benefits may consult
team members and harms by: external advisors.
consider • Applying • Reviewers offer
ongoing projects. patterns mitigation
• Reviewers • Consulting with strategies.
identify relevant internal experts
AI principles as
frameworks for
action.
Example: Reviewers Smarter text- Reviewers found Reviewers

Text-to- assessed a to-speech that the data concluded that
Speech research paper networks can required for harmful the paper was in
Research on text-to-speech help people with applications is not line with Google’s
Paper technology that voice disabilities readily available, and AI principles
would allow a but can also be sufficient differences because of the
system to be used for harmful exist between minimal potential
trained for new applications like synthesized voices for misuse due
speakers with less synthesizing an and recordings for to technical
time and data. individual’s voice listeners to identify limitations.
for deceptive what is real and
purposes. what is synthesized.
Source: Adapted From Google

Both the Canadian government and AI-Global helping businesses improve offerings and
have developed and are beta testing AIA tools reduce risk. At Google, Gennai’s team works
that use answers to a series of questions about a with research and product teams to shape
project to calculate a residual risk score. The tools projects so they conform to ethical guidelines,
also suggest recommendations for modifications, and the team has authority to require
further controls and ongoing monitoring.7,8 changes or even prevent initiatives from
Areas for questions include: moving forward.
• Technology used Axon halted work on facial recognition
technology as a result of its first report on
• Data source and quality
ethical AI, far in advance of similar limitations
• Purpose of the project recently imposed by IBM, Microsoft and Amazon
• Communities likely to be impacted in response to concerns over racial bias in
• The likelihood and severity of impacts policing.9 In addition, Axon’s transparent and
external ethical evaluation process helped
• The presence and effectiveness of controls create a positive public image.
• Project governance and ongoing monitoring Our analysis found that social media
conversations and positive sentiment increased
Benefits and Results of Using an following the company’s announcement of its
Algorithmic Impact Assessment AI ethics board and the publication of findings
Algorithmic impact assessments are already (see Figure 1).10
Figure 1. Axon - Social Media Conversations and Sentiment Analysis

Jan 2018 – Jan 2020 (Indexed to 100)
30,000 100%
Percent Positive Mentions

Mentions
Mentions
Positive Sentiment
15,000 50%
0 0%
Jan 18 Apr 18 July 18 Oct 18 Jan 19 Apr 19 July 19 Oct 19 Jan 20
• Creation of the • Concerns over • First board report • Second board

board announced Ethical use of Facial released report released
Recognition
• 39 Civil Rights • Axon bans facial • Launch of Axon,
Groups Urge recognition in body AI based License
Strong Ethical cameras until ethics Plate Recognition
Review of Axon’s issues resolved
Police Technology
Source: Gartner
3Q20 37
There are other benefits too. Google’s Gennai Two opposing statements were presented. Question
says working with research and product teams asked: Please slide the arrow to indicate which of the two
on project risk mitigation helps developers learn statements you most agree with.
about the ethical implications of their work. 4
“First Report of the Axon AI & Policing Technology Ethics
A representative of Axon told us the push in Board,” Axon.
the company had come from the bottom up, 5
“Artificial Intelligence at Google: Our Principles,” Google.
adding that the staff wanted to make sure the AI 6
For a more detailed account of an internal algorithmic impact
roadmap was built responsibly and remain very assessment process, see “Closing the AI Accountability Gap:
interested in giving help and feedback. Defining an End-to-End Framework for Internal Algorithmic
Auditing,” Proceedings of the 2020 Conference on Fairness,
Accountability and Transparency.
M. Coeckelbergh, “AI Ethics,” The Massachusetts Institute of
1
Technology, 2020.
7
“Algorithmic Impact Assessment,” Government of Canada.
2
Ethics washing means making unsubstantiated or
8
“Responsible AI Portal,” AI-Global.
misleading claims about adherence to ethical values or 9
“Tech Companies Push for Nationwide Facial Recognition Law.
implementing only superficial measures to appear more Now Comes the Hard Part,” CNN Business.
ethical than is the case. Ethics shopping means selecting 10
Social Media Methodology: We conducted social listening
principles from the marketplace of ideas to retroactively analysis leveraging third-party data tools to complement or
justify choices that have already been made rather than supplement the other fact bases presented in this document.
modifying behaviors in response to public standards. See Due to its qualitative and organic nature, the results should
“Translating Principles Into Practices of Digital Ethics: Five not be used separately from the rest of this research. No
Risks of Being Unethical,” Philosophy & Technology. conclusions should be drawn from this data alone. The social
3
Gartner Artificial Intelligence Consumer Perceptions survey, media data referenced is from 1 January 2018 to 31 March
conducted online during January and February 2018 among 2020 in all geographies (except China) and recognized
4,019 respondents in the U.S. and U.K. Respondents ranged languages. Sentiment Classification: Sentiments have been
from 18 through 74 years old, with quotas and weighting assigned based on a stratified sampling approach by manual
applied for age, gender, region and income. Results assessment of leading conversations in the top quartile (based
are representative of each country’s online population. on retweet count) for each month.

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As Demand Soars for

Pandemic Analytics, Chief
Data Officers Need a
Business Leader Mindset
by Eliza Krigman and Mike Rollings
with contributors Jitendra Subramanyam, Ben Hertzberg,
Daniel Ryntjes, Rita L. Sallam and Farhod Yuldashev
The spike in demand for real-time (or near real-time) business insight in the
wake of the pandemic has moved data and analytics (D&A) professionals into
a central role in the drive for revenue now and long-term profitability.
Nearly all D&A professionals (91%) polled in May Almost every facet of the business needs more
noticed an increase in requests for their services frequent intelligence and analysis. Executives
(see Figure 1). throughout the enterprise have consistently
expressed this to us over the past two months.
Chief financial officers are forecasting cash
Figure 1. Types of Data and Analytics Demand
Due to COVID-19 flow on a weekly or daily basis with more
Percentage of Respondents Who Experienced top-down analysis. Chief risk officers are
an Increase in Demand for D&A Services seeking actionable real-time data to support an
increase in requests for reports from internal
8%
stakeholders, including the board of directors.
Yes, Updates
Chief marketing officers are using shorter
to Existing
review cycles to track campaigns, and chief
Predictive Models
sales officers are providing constant updates
9% to their teams, based on market research, to
No highlight nuanced differences with rivals.
48%
13% Yes, New Beyond informing their own organizations, D&A
Yes, New Reports and professionals are being called upon to provide
Predictive Dashboards information to unrelated business parties and
Models government agencies — more than half of
22% 214 D&A professionals indicated as much in
Yes, Internal our May poll.1
and External Running a business on monthly stats and
Data Sharing quarterly pie charts is from a bygone era. Some
n = 236 59% of global enterprises are using advanced
Source: Gartner Snap Poll (May 2020) and predictive analytics, according to a 2020

survey conducted by MicroStrategy.2 But only the company’s vice president of supply chain
39% provide real-time updates to their key and support services, developed a dashboard
performance indicators (KPIs), and just 14% are to track and forecast inventory levels of the
making D&A broadly accessible to employees. 24 U.S.-based hospitals he is responsible
When organizations do have the D&A chops for stocking.
to provide real-time insight, problems that Wright’s team used algorithms from the Ebola
once seemed intractable become manageable outbreak of 2014 to 2016. Information from
or go away, as long as they answer the clinicians about how much personal protective
right questions. equipment is needed to treat each patient
Those that did the hard work of infusing D&A combined with predictions about the growth
into their workflows before the pandemic were of infections among local populations yielded
able to respond to information needs quickly a “burn rate.”
and effectively when the crisis hit — in a way that The dashboards revealed “where sourcing is
propelled the core mission forward. We’ll tell you critical,” Wright says, and whether “we have to
about three of those organizations below. institute additional conservation measures to
To help your organization meet the increased help extend the life of that inventory for as long
demand for intelligence, D&A leaders need as possible until we do get restocked.”
to adopt a business leader mindset, support Turku City Data, a D&A services company
scenario planning to cope with uncertainty, owned by the Finnish city of Turku, organized
prioritize the right projects and improve the data its data in four categories — people, objects,
literacy of all employees. location and events (POLE) — to help quickly
locate the right information to address a
How Three D&A Teams Met a
pressing business problem. Used with a
Critical Coronavirus Challenge
knowledge graph, a technology that helps
Three health and municipal D&A teams faced monitor complex relationships and also
a pivotal test as the coronavirus outbreak uncover the existence of previously unknown
transformed the world in a matter of weeks, with relationships, the local government could
conditions on the ground changing by the hour. match datasets to problems.
St. Luke’s, an Idaho-based healthcare nonprofit, This technology made it possible for Turku to
created analytics tools under the leadership of figure out how to deliver food to senior citizens
chief digital and analytics officer Onur Torusoglu stuck at home because of COVID-19 while
that served two purposes: tracking critical respecting social distance requirements.
information related to COVID-19 and modeling
City officials can present POLE with the
how the disease would likely affect its hospitals.
following query: “How can I allocate drivers to
The dashboard served as a command center for
different zones across the city with the least
all virus-related indicators and refreshed every
possible travel time, given traffic conditions and
15 minutes. Among the inputs: The number of
population density along routes?” POLE responds
ventilated and infected patients at each hospital,
by organizing the data as: “Driver P using vehicle
the stock of preventative equipment, test
O to deliver food at location L, where the arrival
supplies and testing demographics.
is recorded as event E.”
While St. Luke’s digital and analytics team managed
to build the first iteration in just 10 days, the project D&A Must Shift From Business
came on the heels of an 18-month transformation Support to Business Catalyst
to data-driven analytics. Torusoglu’s previous It’s time to dispense with conventional beliefs
experience in leading organizational change — about D&A, such as the notion that it only
this was his third transformation in the healthcare responds to business needs instead of acting
space — helped him succeed. as a catalyst. Or that D&A is merely a support
Intermountain Healthcare also made use service that delivers capabilities to a targeted
of previous investments in D&A to track audience, rather than a widely practiced
pandemic-related information. John Wright, enterprise competency. This is the old way of
3Q20 41
thinking, and it keeps organizations from using assumptions, but not so long as to encourage
data in new ways and responding to intelligence science-fiction-like explorations (most likely
needs quickly or effectively. somewhere between five and 15 years).
Instead, discuss the organization’s emerging • Use the scenario planning approach that
business priorities and how data can be central best suits you. You could use two scenarios
in achieving these goals. D&A executives who to describe a potential postpandemic effect
become active advisors to business strategy and its opposite, for instance. That’s one of
double their odds of generating consistent many options.
business value.3
• Translate each scenario into “early signposts”
Adopting the mindset of a business leader is an that indicate a particular outcome is emerging.
essential part of determining how best to meet Use analysis that elevates and monitors weak
the D&A needs at your organization. In practice, signals. This will help the company move from
this means recognizing that: keeping options open to making decisive
• D&A strategy is business strategy. choices again.
• Internal and external stakeholder wishes, • Identify and adjust existing analytical models
especially their unmet needs, are the source to adapt business decisions to each scenario.
of opportunity. For example, how should forecasting models
be changed to reflect variability in geographies
• Internal assets, external data and insights can
opening or closing?
fundamentally shape the business and reinvent
how it creates and delivers value. Learn more about how to execute scenario
• Value propositions should have a clear planning for pandemic recovery in “Don’t
expression of their ability to drive new business Make Predictions and Choices, Instead Create
goals, enable decisions or provide utility, such Options by Using Scenario Planning for
as self-serve capabilities. Pandemic Recovery.”
• Success should be determined by the Prioritize Projects With High Business Value
degree of data-driven transformation
achieved, the progress toward stakeholder Don’t try to do everything. Take a more rigorous
goals and enterprise improvement of D&A approach to assessing which projects you
capabilities. will pursue in the coming weeks and months.
Evaluate the net business value of potential
Provide D&A to Support Scenario Planning investments before you commit to them.
Businesses of every stripe find themselves in This will address one of the most common ways
uncharted territory, leaving them unsure of to undermine success: a lack of focus on the
how to respond now or plan for the future. most valuable opportunities.
Scenario planning offers one way to cope with D&A leaders should build portfolios of potential
so much uncertainty — and chief data officers options and evaluate them by criteria that
have an important role to play in support of illuminate their net business value. These
those efforts. criteria include:
Some best practices and mentalities for • Relevance to mission-critical business priorities
corporate scenario planning include: and competitive advantage
• Challenge strategic assumptions and identify • KPIs that measure business impact
options so that the future — whatever it brings
• The business processes, events or decisions D&A
— does not take your organization completely
can impact to improve mission-critical priorities
by surprise. Identify new data sources to
distinguish the emergence of one scenario • The risk and potential return from using
versus another. unfamiliar or unproven D&A technology
• Make sure the time frame for scenarios is • Availability of data sources, analytics
long enough that you let go of present-day capabilities, skills and competencies

Boost Data Literacy Throughout • Work with third parties to plan data literacy
the Organization programs throughout the workforce that include
Businesses that want to compete — and succeed training, coaching and raising awareness.
— in the economy of tomorrow need a workforce • Prepare the learning module for each area
that can consume, analyze and make smart of study with an engaging combination of
decisions with data. Unfortunately, this is a weak methods, including computer-based training,
spot for many organizations, and it hampers their brown bag sessions and on-the-job coaching.
ability to become data-driven enterprises. To
remedy this, D&A leaders should: 1
Gartner D&A Snap Poll, May 2020
• Work with HR to identify the various jobs and/ 2
“The Global State of Enterprise Analytics, 2020,” Forbes.
or roles within the organization and the level of 3
Gartner’s Fifth Annual Survey of CDOs (2019)
data literacy they require.
• Work with business unit leaders to map skill
requirements to each job role.
Lead the
Change
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Mass-Produced Personal
Compliance Guidance
by Matt Cantrell
Compliance guidance that applies to an employee’s real world is, of course,

necessary for changing employee behavior to prevent misconduct and shortcuts
that circumvent policy. And obviously, compliance teams must update guidance
to meet those needs as they evolve.
But the nature of work is not evolving; it’s Compliance officers should also take advantage of
roiling with upheaval. And compliance simply an available tool that they’re likely familiar with as
hasn’t kept pace. consumers. Consider the evolution of sales, digital
COVID-19 is the most prominent example right marketing and customer service over the last
now, although it’s not the only one. Since March, two decades. In the early stages of the internet,
88% of HR executives have advised employees digital advertisers relied on mass marketing — the
to work from home, and an average of 58% of delivery of a single message to a broad audience.
their workforces have had to use new skills in That’s a far cry from your Netflix queue today.
response to the pandemic.1
Netflix can tag components of any given show
And in the past several years… or film according to the user groups who would
• More than 60% of jobs have seen more than enjoy each element. Would this thumbnail
25% of their required skills change. appeal to a teenage boy? Would this description
• Fifty-seven percent of companies have intrigue a sci-fi aficionado? The company
increased geographic dispersion in also tracks significant amounts of data about
their workforce. customer interests. What types of movies did
you watch last year? Which ones did you turn off
• Eighty-two percent of employees are
encountering new cultural tensions following after five minutes? After mapping the program’s
a significant organizational transition.2 tags to your interests, Netflix can deliver a
selection that feels handcrafted to your taste,
Yet among surveyed compliance leaders ... even though it came from an algorithm, not a
• Just 31% provide compliance guidance human curator.
that contains only components relevant The revolution wrought by this type of
to employees. mass-produced personal experience can
• Only 16% have reevaluated guidance in the extend to training and guidance — it is the
face of corporate changes.3 compliance team’s turn.

Relief for an Unsustainable Situation • Step 1: Review (and Prioritize) Guidance Library
Most compliance programs work to make their • Step 2: Unpack Component Parts
employee guidance applicable by creating custom-
• Step 3: Classify Component Parts by Audience
made guidance to address top employee needs
as they arise. That works, but it’s not scalable. It • Step 4: Deliver Tailored Content to
only addresses one need at a time, it has high Employee Groups
ongoing costs and you have to start from scratch
when needs change. Compliance executives tell Step 1: Review (and Prioritize) Guidance Library
us they don’t have the time or money to do that,
The first step is deciding which parts of the
particularly in less regulated industries where there
guidance library to start with.
might not even be one FTE on the team for every
1,000 corporate employees. Even if that workforce For most compliance functions, time and
were static (which it isn’t), it would still typically resource constraints will require a narrow initial
be spread through scores of countries (with a scope for a configuration project. One approach
variety of languages) and an even greater mix of is to begin configuration with the highest-priority
responsibilities (which are constantly changing). compliance guidance for this year. (For example,
The answer is configuration — creating a modular our polling shows that the top policies updated
form of compliance that can be assembled many in response to COVID-19 as of 9 April 2020 were
different ways. Since employees receive only information security; recognizing and reporting
what applies individually to them, the compliance misconduct; environmental; health and safety;
guidance feels fully customized, even though it’s and data privacy.) Another path to configuration
been selected from an existing library. is to apply it gradually as a part of all future
Configuration simultaneously addresses many guidance refreshes (e.g., updates to policies and
employee needs, has low ongoing costs after the training modules).
initial investment and is easy to build upon when QBE started with its internal policies and
needs change. procedures. As shown in Figure 1, the compliance
Below are the four steps to configuration, team prioritized the policies and procedures that
followed by a walk-through of how QBE North apply broadly to the entire employee population
America, a division of the QBE Insurance Group, and moved on to departmental policy sets
applied each of the steps. prioritized by risk.
Figure 1. Identification of First-Priority Policies
Phase 1: Corporate Policies

• Code of Ethics and Conduct
• Whistleblowing Policy Take a Top-Down Approach
• Conflicts of Interest Start with the corporate policies and
• Privacy and Information Security Policies procedures that apply to your entire
• Gifts and Entertainment Policies employee population.
• Records Management
Factors to Prioritize:
• Sanctions
1. Content that applies broadly, as this
presents the greatest opportunity
Phase 2: Departmental Policy Sets 2. Departmental policy sets that align
• Based on your risk assessment results, with your highest areas of risk
high-risk departmental policy sets 3. Additional (medium- and lower-risk)
• Medium-risk departmental policy sets departmental policy sets
Source: Adapted From QBE
3Q20 45
Step 2: Unpack Component Parts Method 2: Disregarding obligations (e.g., if they
are duplicates, if they aren’t actionable)
The next step is to break down the selections into
the discrete employee obligations they contain Method 3: Simplifying obligations at the source
(see Figure 2). (e.g., modifying an underlying policy, procedure
or process design).
QBE analyzed 15 policies and identified 432
distinct obligations contained within. Without In addition to these all-employee obligations,
others applied only to certain employee groups.
eliminating any requirements from the policies,
the compliance staff was able to convert the To ensure that simplifying doesn’t lead to
432 distinct obligations into 22 “simplified” all- increased noncompliance — the opposite of its
employee obligations. The team used a system intended effect — QBE implemented controls such
to winnow the number, applying one of three as an audit trail maintained within the register
that indicates the basis for the consolidation. That
distinct “methods” to each obligation:4
makes it very easy to undo or be challenged at a
Method 1: Consolidating obligations (e.g., later time by another assurance function. Further,
broadening the scope of an obligation, the final obligations always link back to the source
presenting lists within an embedded hyperlink) records for convenient verification.
Figure 2. Identification of Requirements Within a Policy
Sample Compliance Policy

(Required actions highlighted) Sample Requirements
for All Employees
• Handle confidential information
with care.
Sample Requirements
for Some Employees
• Log into a VPN when using
public Wi-Fi.
• Do not contact customers using
personal devices or accounts.
• Ensure direct reports are
properly trained before handling
confidential information.

Step 3: Classify Component Parts by Audience QBE then identifies the aggregate number of
Next, map the obligations to the employee obligations applicable to each employee group
groups they apply to. QBE maps obligations (see Figure 3).
using job code data and other role identifiers — Generally, policies tend to be written broadly and
for instance, employees who engage directly with in overly general terms, which makes it inherently
customers are mapped to certain job titles within difficult for employees to understand how
certain departments. The key here is to bring in policies impact their individual role. QBE found a
the right stakeholders. If you gather the relevant new means for delivering compliance to the first
subject matter experts and policy owners in a line when the audience became only those with a
room, unpacking and classifying obligations is a “need to know.”
lot faster and easier than it sounds. Note: Alternative ways to classify employee
QBE includes two measures in this step: groups exist for compliance programs that don’t
have access to robust HR management data or
• Policy owners sign off on the employee groups
similar data sources. For example, employees
their obligations apply to. can self-select into groups through a simple
• Compliance maintains an audit trail of how activity questionnaire, or managers can make this
obligations are defined, simplified and sorted. selection for their teams.
Figure 3. Classify Component Parts by Audience
Employee Groups
Sample Staff With
Obligations New Staff Staff With
Managers Customer Remote Staff
(<1 Year) PII Access
Contact
Handle
confidential
information
with care.
Log into a VPN
when using
public Wi-Fi.
Do not contact
customers using
personal devices
or accounts.
Ensure direct
reports are
properly trained
before handling
confidential
information.
Total
15 5 8 3 6
Obligations
3Q20 47
Step 4: Deliver Tailored Content
Joseph Sherno
to Employee Groups
Chief Compliance Officer
QBE is developing a policy map where
of QBE North America
employees would see all the obligations that
relate to their individual role based on their role
profile. In the example in Figure 4, John and
Jane both belong to the “QBE People Leaders”
group, but the rest of their groups are different.
So, they both receive guidance for people
leaders, but the other guidance they receive is The shift to modular compliance creates a
different. Embedded links provide employees whole new ecosystem that can be expanded
with access to all the information needed to fulfill over time as needs change. Joseph Sherno,
each requirement and can link back to the full chief compliance officer for QBE North America,
policy detail. told us in an interview that the benefits are
Simplifying employee obligations and mapping clear: The move encouraged “innovation within
their applicability to specific roles created compliance as a function” and improved “first-
an opportunity for QBE to break away from line accountability and ownership.”
the old policy-centric way of communicating
compliance information. Policies remained 1
Gartner COVID-19 Crisis Benchmarking Against Your
intact, but employees now have an alternative Peers Webinar Poll (2 April 2020)
means for accessing what they need to 2
2019 Gartner for HR Leaders Research
know that is both user-friendly and far 3
2020 Gartner Compliance Guidance Imperatives
more effective, clarifying expectations and Survey for Legal and Compliance Leaders
responsibilities. 4
See “Case Study: Configurable Compliance Guidance
(QBE North America)” for more detail on the company’s
simplification methodology.
Figure 4. Methods for Providing Content Specific to Employee Groups
John Smith Jane Doe

Sr. Manager, Sales Sr. Manager, Finance
USA — New York USA — Wisconsin
Click to see your obligations: Click to see your obligations:

For All QBE Employees [-] For All QBE Employees [+]
If you have a potential For QBE People Leaders
conflict of interest as [+]
defined by these guidelines,
For Staff With Access to
inform your manager and
PII [+]
disclose the conflict using
our reporting platform. For Staff Who Travel
Internationally [+]
For QBE People Leaders [+]
For Staff Who Engage
For Staff With Customer
With Regulators [+]
Contact [+]

5 Things the
Best General
Counsel Do
Differently
Only 8% of GC are
performing their ideal role
as a corporate leader. What
8
separates the best general
counsel from the rest? %
Discover five shifts in behavior to

become a more effective leader:
gartner.com/en/legal-compliance/
trends/best-general-counsel
© 2020 Gartner, Inc. and/or its affiliates. All rights reserved. CM_GBS_988318
Because Every Hire

Counts, Recruiting
Processes Must
Shift in 3 Ways
by Alexia Cambon and Jamie Kohn
HR leaders tell us they are under growing pressure to fill talent gaps quickly, even
as 74% report their organizations have imposed hiring freezes.1 That means every
hire counts — new employees have an outsized impact on the ability of their
enterprise to respond, recover and renew growth. But talent acquisition is failing.
Even in the best of times, how well the company point in time where existing recruiting strategies
succeeds at finding the right fit for the right job would be outdated (see Figure 2).
can make or break a business strategy. Boards of The pandemic has brought this moment
directors rated talent acquisition as a top business forward (see Figure 3). The acceleration in these
challenge they are facing in 2020;2 only 24% of fundamental shifts means business leaders must
business leaders agree they can quickly hire the rethink — now — how to acquire skills necessary
talent they need with their current resources and for achieving strategic goals.
processes.3 Where hiring is happening, 40% of
hiring managers report that their new employees • The first macroshift is skills evolution beyond
business leader expertise, making it difficult
leave their teams no better off. Only 29% are
for recruiters to rely fully on the business to
highly prepared with the skills needed for their
articulate what should be hired. Accelerant:
role, and only 23% are prepared with skills needed
A virus-driven shift to remote work and social
for the future. Further, only 16% of new hires have
distancing in on-site work has fueled a boom in
both.4 And as the COVID-19 pandemic creates
work redesign and automation.
volatility and uncertainty in operations and
strategy, it’s even harder to meet talent needs. • The second macroshift is skills dispersion
beyond known and trusted talent pools,
Regardless of hiring volume, every hire counts
making it difficult for recruiters to fully rely on
when the quality of that hire has an outsized
familiar sources. Accelerant: Lockdown life,
impact on business progression (see Figure 1). work lulls and layoffs for some have driven a
Three macroshifts exacerbate the crisis in boom in virtual learning, enabling talent to
quality; they’ve been leading toward a future acquire skills from new and different sources.

Figure 1. Business Impact of Hire Quality by Hiring Volume
High-Quality Hire
Team Boosters Growth Accelerators

Quality hires for specific Quality hires in more
critical roles have an outsized roles enable acceleration
impact on company success. past the crisis.
Hiring Every Hire Hiring

Less Matters More
Today More Now Today
Toxic Hires Growth Inhibitors

With fewer hires, each poor Poor hires throughout the
hire has a larger negative organization inhibit the collective
impact on the team. effort to adapt in changing times.
Low-Quality Hire
Source: Gartner
• The third macroshift is the employee Prioritize Skills Acquisition

experience revolution in workers’ demand Hiring managers can no longer count on their
for more influence on and control over their experience to make quality hires; 46% of them
jobs, making it difficult for recruiters to rely have low familiarity with the role they are hiring
fully on their usual incentives to attract talent. for and 32% of hiring managers have not hired
Accelerant: Remote work gets candidates for the role before.5 That’s a problem: A manager
accustomed to designing their own employee who hires frequently tends to have a 9% boost in
experience at a time when this autonomy and quality of hire over one who hires rarely.6
flexibility is desperately needed.
Business leaders typically define hiring needs
Progressive recruiting functions adapt by shaping by articulating the candidate profile they want
the workforce, which consists of three strategies: to see in the role, relying on presumptions that
1. Defining talent needs by prioritizing skills certain skills are tied to certain qualifications
instead of profiles or experiences. This approach fails recruiters
in an environment where skills are evolving so
2. Sourcing by uncovering the total skills market rapidly that the profile articulated by the business
instead of targeting known talent pools leader is neither realistic nor attainable. Hiring
3. Attracting talent by creating a more managers often recycle the last job description
responsive employee experience offering and add new desired skills to the list, creating an
instead of just describing the existing impossible task for recruiters who must search
employee value proposition the labor market for these “unicorn” candidates.
3Q20 51
Figure 2. Decline in Viability of Recruiting Methods Against Evolution of Macroshifts
High
Viability of
Traditional
Recruiting
Methods
Where You Were
Headed
The new work
environment makes
traditional recruiting
methods no longer
fit for purpose.
Evolution of
Macroshifts
Low
Recent Past Present Near Future
Source: Gartner
Figure 3. Acceleration of Need to Rethink Recruiting Strategies Due to COVID-19
High COVID-19
Viability of
Traditional
Recruiting
Methods
Where You Were

Headed
is where you are now.
Evolution of
Macroshifts
Low
Recent Past Present Near Future
Source: Gartner

Start instead by examining the work that needs no longer exclusively held by individuals with
to get done — liberating recruiters and hiring specific credentials and backgrounds. With skills
managers from assumptions about the type dispersing beyond these known talent pools,
of person to hire. The result: More options traditional sourcing approaches represent a
are available. Recruiters at Charles Schwab missed opportunity.
move away from a “default hiring mindset” by
Instead, business leaders who shape the
first consulting with hiring managers on the
key outcomes of the role and which skills are workforce identify where existing strategies
essential to achieving them. Such recruiting and processes are limiting their access to
consultations help hiring managers see where people with the necessary skills. A skills-based
a set of skills may not exist in one person, then sourcing strategy agnostic of any other criteria
identify potential hiring pathways to build, (e.g., background, credentials, experience)
buy or borrow what they need (see Figure 4). opens broader skills markets. Hiring managers
Consequently, Charles Schwab meets talent should be asking: Where can search criteria be
needs more effectively, with a 45% increase broadened? Where is the process noninclusive?
in placement rates for candidates sourced Casting the net wider also offers diversity
by recruiting. benefits: Our analysis shows that nontraditional
Uncover the Total Skills Market talent pools include 11% more women and
7% more minorities than more conventional
Recruiters have long relied on known talent sourcing would find.8
pools to source skills, with business leaders
investing heavily in improved access through Don’t forget to explore skills available through
technology or with business leader networks. alternative employment models as well as
However, 43% of candidates are now self-taught underutilized skills from within your own
in one or more of their role’s requirements,7 organization. Sometimes companies can fill
and increasingly organizations are developing skills needs faster and more cost efficiently by
high-value skill sets through accelerated training considering contingent workers or rotational
programs throughout the business. Skills are assignments for internal employees.
Figure 4. Charles Schwab’s Hiring Manager Option Provisions
Career Paths Where Skills Are Found
Market Researcher Website Developer Data Scientist
Potential Hiring Pathways
Hire externally for the Add more positions to Upskill employees as part
most urgent of these roles. the team. of an org-wide growth
strategy.
“Let’s hire the market “Let’s hire the market
researcher.” researcher and add a “Let’s build these
permanent data scientist capabilities in-house.”
position to our team.”
Estimated time to fill: 2-9 months Estimated time to fill: 6-12 months Estimated time to fill: 9-15 months
Estimated cost: $90,000 Estimated cost: $200,000 Estimated cost: $40,000
Source: Adapted From Charles Schwab
3Q20 53
Unilever expands sourcing through a flexible Business leaders rely heavily on the company’s
talent model that helps hiring managers examine “employment value proposition” (EVP) to
skills availability against frequency of skills attract candidates.
demand (see Figure 5). Hiring managers use the
model to staff projects up and down as business But 65% of candidates have cut short the
needs change. hiring process because they found aspects of
the job (e.g., work-life balance, development
Create a More Responsive Employee opportunities, company culture) unattractive.10
Experience Offering They are demanding more influence over their
Nearly six in 10 (59%) employees agree their day-to-day experience: 42% of candidates now
employee experience is as important to expect to influence location, work hours and
them as compensation and benefits are.9 remote working arrangements.11
Figure 5. Unilever’s Talent Sourcing Choice Model
Scarce
Insource/Outsource Full-Time Employees

Internal employees, Core strategic capabilities
freelance consultants kept in-house
Skills
Availability
Outsource Automate
Contingent workers, Frequent, repetitive,
crowdsourced insights systematic work
Broadly
Accessible
Point-in-time Recurring
Frequency of Skills Demand
Source: Adapted From Unilever

Again, the COVID-19 crisis is speeding up this Talent intelligence helps Philips’ talent
trend — employee experience is an increasingly analytics team understand what candidates
hot topic (see Figure 6). Employees are looking want and how the company stacks up against
for organizations to accommodate their need competitors for key talent segments. The staff
to adjust when, how and where they work. adapts job design accordingly. For example,
Employers that don’t make these adjustments Philips determined that software developers
will not stay competitive for long. preferred to work on a variety of high-impact
Deliver a more responsive EVP by leveraging projects throughout the business; they were
insights from the individual candidate to the poachable if enticed by the opportunity to
collective labor market, and feed these back work on something new.
to recruiting. Create a more compelling vision So, business leaders at Philips worked to
for candidates by spending more on data develop a software center of excellence
analytics to understand changing preferences to rotate developers around the business
and regularly monitoring EVP offerings in light (see Figure 7). The move set Philips apart
of shifting circumstances. from its rivals.
Figure 6. Volume of Tweets by EVP Category
1,250 People
Organization
Work
Rewards
Number of Tweets
Opportunity
625
0
27 2 9 16 23 1 8 15 22 29 6 13 20 27
Jan. Feb. Feb. Feb. Feb. Mar. Mar. Mar. Mar. Mar. Apr. Apr. Apr. Apr.
n = 13,684 tweets
Source: Tweets Collected by 4 May 2020
3Q20 55
Figure 7. Philips’ Talent Intelligence Influence on Work Design
Persona: Software Developer

• Prefers to work on high-impact projects throughout the business.
• Easily poached when offered new projects by competitors.
Philips’ Software COE
Marketing Engineering
R&D Sales
Service
Project: Building a database Project: Mechatronics design

for CX data capture Project Length: 1 year
Project Length: 2-3 months Job Features:
Job Features: • Experience in the MATLAB
• Cross-functional networking • System architecture building
• Creative thinking • Regulatory government and industry
• Direct business impact requirements analysis
Source: Adapted From Philips
Gartner Managing Through Disruption Benchmarking

1 6
2019 Gartner Hiring Manager Survey
Against Your Peers Webinar Poll (21 April 2020) 7
2020 Gartner Candidate Panel Survey
2
2020 Gartner View from the Board of Directors Survey 8
Gartner TalentNeuron
3
2019 Gartner Digital Talent Gap Survey 9
4
2019 Gartner Hiring Manager Survey 10
5
2019 Gartner Hiring Manager Survey 11

Decision-Making
Principles Drive
Quality and Efficiency
Through Disruption
by Bryan Klein and James Crocker
Upheaval is hard on teams — a torrent of new expectations typically lessens

emphasis on quality throughout the enterprise, and brush fires take focus away
from planned long-term change to better serve the business.
But favoring speed over high standards, or now organization needs, without escalating. They can
over later, presents a false dichotomy. Pathing have both — each at the right time and place.
employees to more efficient solutions helps avoid
trade-offs. But when trade-offs are necessary,
explain how and when to weigh choices so During disruption, executives tend to
employees, whether they are on the front line
turn to an old standby: reinforcing the
or within a specific function, can understand
what to do. Where should they compromise? importance of excellence. There’s nothing
When should they hold fast? Decision principles wrong with that. It just has no impact.
can help them do what they need, and what the
3Q20 57
In Pursuit of Excellence: Support for the Workforce take quality-centered actions independently
When a disruption hits, employees feel like and adapt to changing conditions around them.
quality conflicts with new expectations and It’s no surprise, then, that those who work in
a strong culture of quality are 3.5 times more
see others evading quality guidelines. In fact, a
likely to overperform individual goals — and their
single disruption, on average, reduces employee
companies are 3.4 times more likely to overperform
emphasis on quality by 9%, based on our recent
enterprise goals during a disruption, as well.1
analysis of over 1,200 global employees across
functions, industries and levels of seniority (see Typical Tactics for Maintaining Quality
Figure 1).1 That decrease is especially concerning Don’t Work During Disruption
considering employees have been experiencing
During disruption, executives tend to turn to an old
three disruptions per year, and the pandemic has
standby: reinforcing the importance of excellence.
led to a near-constant state of interrupted focus.
There’s nothing wrong with that. It just has no
During the best of times, a strong culture of impact. Why? Because in a disruption, employees
quality is beneficial. Employees who work in a are flooded with communication. More than 70% of
strong culture of quality experience 65% fewer employees say messages about multiple, competing
mistakes in their daily work than their peers do — priorities all increased during a disruption.1
saving their companies time and money.2
Another common way to shore up quality is
And during disruptions, a strong culture of quality access to processes, training and data. But as
can be a competitive advantage. When a culture priorities and circumstances change, employees
of quality is strong, employees aren’t simply begin to question whether the tools are still
following established rules and processes. They relevant — and some will stop using them.
Figure 1. Impact of Disruptions on Culture of Quality

Illustrative
Disruption Disruption Disruption
Always
Employee Emphasis
on Quality
Never
Time
-9% — average change in strong culture 3 — average number of disruptions

of quality as a result of one disruption. a company experiences each year.
n = 1,203 global employees

Source: 2020 Gartner Culture of Quality During Disruptions Survey
Note: A strong culture of quality here represents an organization with an above average culture of quality index.
The culture of quality index measures the strength of a company’s culture of quality based on how much
employees hear, feel, see and transfer quality at their company.

The Missing Piece: Help Navigating Tensions 2. Build Judgment: To build this muscle in a safe
The most effective tactic by far is helping environment, the insurance company Aviva
employees navigate tensions (see Figure 2). uses an online game that asks employees to
Conflicting signals, changing expectations and make a difficult trade-off in a real-life business
new circumstances distort the internal calculus scenario and provides instant feedback
employees use to determine the right balance on that choice.
of quality versus other priorities, such as speed
and cost. As a result, employees are paralyzed 3. Clarify Trade-Offs: Executives should help
by indecision when faced with an unclear employees understand when quality is crucial
situation involving these competing concerns — and when it is not. It’s impossible to determine
something over 60% of employees experience this for every possible scenario, but guidance
at least weekly during a disruption.1 can be as simple as helping employees think
Three simple but powerful actions can support about three levels:
decision making: • Must have quality — when quality is non-
1. Acknowledge Tensions: One pharmaceutical negotiable (e.g., customer safety)
company forced executives to decide during • Should have quality — when quality needs
a workshop between two equally important
to be balanced against other priorities critical
yet competing priorities. Once aligned,
to the business
leaders could be more transparent with
employees about the necessary trade-offs • Could have quality — when quality is less
and expectations that they make them. of a priority
Figure 2. Improvement in Culture of Quality During Disruptions From Various Approaches

Maximum Impact of Quality Approachesa
30%
Reinforcing Importance Ensuring Access
of Quality to Quality Tools
20%
15%
11% 11% 11%
0%b 0%b 0%b

0%
Senior Middle Messages Policies and Data Training Help
Leaders Managers Consistency Processes Navigating
Tensions
n = 1,203 global employees
Source: 2020 Gartner Culture of Quality During Disruptions Initiative
a
Maximum impact shows the percentage increase in culture of quality during a disruption as a result of moving
from the 10th to the 90th percentile performance in each of the approaches. The coefficient of determination
for the model is 42%.
b
Denotes no statistical significance
3Q20 59
In Pursuit of Efficiency: A Look at Legal In the process, however, lawyers spend too much
Legal departments serve as the firefighting time and money on overanalysis, duplicate work,
function within most organizations. When crises reworking law firm guidance and mismanaging
hit, legal is always at the table and often leading outside counsel spend. Overall, 1,040 hours a
year for every 10 FTEs is wasted in response to
the response. And these departments are under
unplanned work.1 That is 20% of the time spent
siege right now. In the wake of the pandemic and
on the unexpected — and time is in short supply.
ensuing recession, one general counsel said an
influx of novel legal questions combined with the Managing that time better means conserving the
work-from-home environment made her feel like ability to protect the company now — as well as
her team has 50% more work, but 50% less time. in the future. Legal departments that are efficient
in unplanned work are about twice as likely to
Indeed, 74% of corporate counsel reported
have implemented plans for legal transformation
feeling at least moderately burnt out in a June
and to have increased the speed at which they
flash poll by the Association of Corporate
provide legal advice.1
Counsel.3 To manage legal work and support the
business through the pandemic, legal leaders Typical Tactics for Getting
have retasked lawyers and reallocated funds, More Efficient Won’t Do the Job
and they have scoped down, paused or canceled
Based on more than 60 interviews, we found
other work where possible.
that leaders typically aim to increase efficiency
Such a whirlwind of adjustments isn’t unique in unplanned work by getting closer to the
to COVID-19 response. In other matters too, business, so legal can anticipate issues that
63% of legal teams pull resources from other may arise and identify issues sooner when they
workstreams to support unplanned work.4 That do occur. The reasoning is this: Legal can avoid
parade of trade-offs is not sustainable. Legal inefficient last-minute work and even plan ahead
cannot forever put off transformation that will for potential emerging issues.
allow it to support the business of the future in
Providing decision principles for unplanned
order to address the crises of the present.
work has more than double the impact of early
Some legal leaders believe this trade-off is identification of emerging issues (See Figure 3).
unfortunate but inevitable, that when they get This makes sense. Early identification is hard.
hit with an avalanche of high-urgency work, they Several general counsel told us that even though
must bring all hands on deck and swarm the their organizations had pandemic plans, they
issue to protect the business. could not make use of them.
Figure 3. Impact of Approaches on Unplanned Work Efficiency

Percentage of Maximum Improvement as a Result of Moving From 10th to the 90th Percentile
Performance in Each Approach
60%
p 2.3x 49%
30% 21%
0%
Early Identification Decision Principles
of Emerging Issues for Unplanned Work
n = 197
Source: 2020 Gartner Legal Department Projects Panel Survey
a
The model’s coefficient of determination is 41%.

The Missing Piece: Decision Principles To create decision principles for unplanned work,
for Unplanned Work to Avoid Trade-Offs legal leaders should:
Decision principles are effective because 1. Establish, iterate and codify risk tolerance
they make expectations clear without stifling based on strategic objectives. When
individual judgment. These guidelines are useful unplanned work arises, risk tolerance can
across a broad range of issues because they change quickly and often. In the absence of
provide repeatable, scalable guardrails that decision principles, ad hoc decision making
remove uncertainty and overconservatism — a can lead to excess iteration and rework.
common problem in legal departments. These Lawyers can gather too much subject matter
guardrails help develop lawyers’ judgment expertise — too much attention to quality —
skills and create consistency, which reduces and deliver overly conservative guidance
unnecessary escalation and limits shopping for
Because quality for legal means avoiding the
favorable legal guidance (see Figure 4).
right risks while enabling strategic outcomes,
Thus, legal departments that achieve efficiency the “must-have quality” guidance should
by providing their lawyers with decision come in the form of “must avoid outcomes”
principles will trade off department priorities less (MAOs). MAOs are high-level scenarios that
often when unplanned work strikes. would keep a company from achieving
Within legal departments, decision principles strategic objectives. They allow lawyers to
fall into two categories: those relating to the risk identify must-have quality — appropriate
tolerance of the business and those that guide risk tolerance — in their guidance to the
lawyers in resourcing decisions. For maximum business. To develop MAOs, legal leaders
benefit, legal leaders should provide a full gamut should agree on key strategic objectives with
of principles in these areas, but only 29% do.1 business partners and brainstorm potential
Figure 4. Why Decision Principles Elicit Greater Efficiency in Unplanned Work
Provide Repeatable,
Develop Lawyer Judgment Remove Uncertainty and
Scalable and Manageable
and Create Consistency Overconservatism
Guardrails
Increased Efficiency in
Managing Unplanned Work
Source: Gartner
3Q20 61
outcomes that would constitute threats. Unplanned issues may themselves be
Examples include loss of license to operate unique, but often the tasks that constitute
in a jurisdiction or noncompliance with a a response are common to a whole host of
consent order with a primary regulator. To them. Legal leaders should identify trends
implement MAOs, leaders should select a and discuss resourcing requirements based
risk advocate within the legal department on the knowledge and experience needed
who can coordinate positions on related for those common activities. They should
emerging issues and serve as the legal point then map out existing providers and align
of contact and expert for other functions. them to resourcing requirements for these
This helps align baseline risk tolerance assignments. The final step is to identify gaps
across a range of issues, and it enables quick in providers for future investment.
identification of necessary stakeholders and
coordination of goals. 1
2020 Culture of Quality During Disruptions Survey
2. Provide lawyers with easy-to-use guidelines 2
2019 Culture of Quality Diagnostic Benchmark
for resourcing decisions so they can manage 3
“COVID-19 Flash Poll Series: Wellness,” Association
and produce high-quality unplanned work. of Corporate Counsel.
Lawyers resist stringent resource constraints 4
2020 Gartner Legal Department Projects Panel Survey.
because they feel these will adversely affect
the quality of their work. But they can spend
time on work that doesn’t require legal skills
when others have spare capacity. They can
also default to their go-to resources, missing
opportunities to reduce costs or use more
relevant resources. Legal leaders should
provide lawyers with easy-to-use guidelines
for maintaining quality that will make work
easier, building buy-in to make working
with legal’s preferred resources the path of
least resistance.

Applying Agile
Methods Outside IT
by Peter Young
Teams can only act and react as fast as their often cumbersome decision-making
apparatus allows. That’s why many corporate functions outside IT are adopting
aspects of the Agile project management methods designed during the 1990s
for software developers. Fast iterations and built-in process flexibility kept them
from wasting time creating products that were obsolete by the time they reached
the market.
Given that these ways of working were designed Agile Project Management: Basic Definitions
for an unpredictable business environment, it’s
• Scrum: Relies on regular checkpoints that allow
no wonder that 25% of internal audit leaders told
a team to decide whether to adjust a project
us they were launching Agile pilots last year.
Another 17% were already using these methods plan. Work is organized into self-contained
for certain processes.1 Also, 63% of HR leaders “sprints” — a set time frame to complete a
report using Agile in some capacity.2 Here’s a group of goals.
look at how five teams in those two functions • Kanban: Revolves around the “Kanban board,”
and in corporate communications are getting which visually displays progress against tasks
selectively familiar with Scrum Masters, sprints, for a particular project, its owners, due date
Kanban boards and standup meetings. Elements and criteria for completion.
can be mixed and matched as any given
department sees fit. Examples of benefits include • Stand-up meeting: Participants gather briefly at
a faster response to the coronavirus pandemic, frequent intervals to discuss their progress on
improved efficiency and better collaboration individual tasks, speeding up work on the most
among teams. important items.
3Q20 63
Internal Audit: Keeping Up • Check-ins at the start of each sprint between
With the Pace of Change each auditor pair and the Scrum Master. They
Audit departments want to more efficiently set expectations to make sure they have the
provide assurance of an ever-expanding and capacity for tackling anticipated issues.
constantly shifting risk universe. Agile’s defined • Daily meetings between the pairs and the
checkpoints prompt auditors to review their Scrum Master during the sprint. They discuss
findings and add, remove or reprioritize testing. tasks completed the day before and those
that will likely be finished that day. The Scrum
Aflac’s Scrum Master and Auditor Pairing: Master provides coaching, addresses delays
More Work Done and Fewer Delays and makes real-time, risk-based changes to an
To get more efficient and reduce delays, the U.S. audit’s scope.
insurance company Aflac opted to redesign audit • A client liaison assigned to each project to
planning and staffing based on Agile methods. review and vet findings with the auditee
Internal audit organized its team structure around throughout the engagement. The liaison helps
a Scrum Master and auditor pairs (see Figure 1). focus the audit on the value it will provide to
Instead of pulling auditors from a pool to work the business.
on individual engagements, Aflac assigns two • The Scrum Master has authority to stop the
— one senior and one junior — to work together audit any time a sprint is complete if useful
throughout the year. The Scrum Master (derived conclusions are ready. This allows for quick
from the former audit director position) assumes changes to the audit plan without wasting time
responsibility for departmental audit planning on unnecessary work.
and scoping along with running daily stand-up
meetings and reviewing work papers. With Scrum, Aflac completed 60 audits
Aflac divides the year into 26 two-week sprint (compared to 40 the year before) with just 75
segments during annual audit planning. Each hours of scheduled audit work left incomplete that
audit engagement takes anywhere between year (down from 1,500 hours the year prior). The
one and five sprints to complete, and the team also boasts higher client satisfaction scores.
Scrum Master typically assigns one auditor pair Aflac’s audit team has not delayed any active
per engagement. Aflac’s process includes the engagements due to COVID-19. In fact, some
following components: projects were finished ahead of schedule.
Figure 1. Aflac’s Simplified Team Structure
Traditional Agile
Director
Scrum Master
Manager
Auditor Pool Auditor Pairs

Source: Adapted From Aflac

Alex Stephanouk, Aflac’s senior vice president of the medical device company set up an innovation
internal audit, credits that success to Agile. He garage. The term is a reference to the humble
also cites the continuity of audit pairs as useful in origins of many Silicon Valley companies where
a remote world where everything else is different. Agile methods gained prominence. In a happy
coincidence, it’s also a nod to the company’s own
HR: Translating Agile Values founding in a Minneapolis garage (see Figure 2).
to Help the Workforce
The process relies on three
HR leaders face mounting pressure to cut overarching strategies:
costs, deliver on the employee experience and
implement the right policies. Agile methods 1. A focus on customer pain points and
and values can help HR understand worker co-creating solutions with end users
needs and collaborate with end users to adjust 2. A condensed timeline for creating and
when necessary. implementing solutions using design thinking
sessions, sprints and minimum viable
Medtronic’s Innovation Garage: Creations
products (MVPs)
That Improve the Employee Experience
3. Evaluation criteria for when and to what
At Medtronic, HR’s process for designing
degree to apply Agile methods
employee solutions relied too much on the
function’s own understanding of the issues (e.g., The core team, six people from HR, is
onboarding, recruiting, employee questions) and supplemented on a project-by-project basis by
too little on input from end users. It risked creating other employees (e.g., process owner, end users,
irrelevant products with low adoption rates. So IT) who provide perspective and assistance.
Figure 2. Medtronic’s Innovation Garage
Build the
pipeline of Design solutions
opportunities
Source: Adapted From Medtronic
3Q20 65
HR sources ideas from the workforce via surveys, S&P Global’s People Agile Team:
idea submission forms and design thinking A Dynamic Internal Consultancy
sessions. Using a matrix based on feasibility and The ability to create space for strategic thinkers
impact, the team places a proposal into one of to solve employee problems is one way to judge
three categories: the success of applying Agile values. S&P Global
• Just Do It: Popular ideas that are limited in did this by assembling and deploying 36 HR staff
scope and relatively easy to implement skilled in project management and collaboration.
The financial services firm’s People Agile Team
• Fast Follows: High-impact, complex
works on an average of 20 projects simultaneously
solutions that will require greater
in areas ranging from leadership development and
exploration and feedback
culture to onboarding and total rewards.
• Save for Later: Solves a persistent customer
To handle such a wide range of topics, the People
issue but is too complex or too costly
Agile Team collaborates on a project-by-project
to implement
basis with internal subject matter experts,
Project timelines can flex. For instance, the including HR business partners, IT, branding
“just do it” initiatives can be fast-tracked. When and communications. Staffing for each project
applied fully, though, the garage works like this: is flexible and decided by the global project
management office.
• Prototyping: The core team collaborates in
two- to three-week sprints with employee The result: an internal consultancy dynamically
participants and HR process owners. If deployed to solve HR problems. “Products
everyone agrees on a prototype concept, are being completed and delivered to our
participants move on. employees faster than ever before,” S&P Global’s
chief people officer told us. What’s more, team
• MVP Creation: Over three months and once members say the experience helped their
again using sprints, the team tests working careers by allowing them to try new things and
versions with end users. It incorporates empowering them to make decisions.
feedback and uses the success measures it
established during prototyping to test the Communications: Aligned, Flexible Messaging
solution’s readiness for the next phase. Change fatigue is the No. 1 urgent problem cited
• Piloting: More sprints over a period determined by by corporate communications leaders over the
the complexity of the experiment. A bigger group past two years.3 Content teams need to pivot to
of end users offers feedback on the prototype. adapt to rapidly shifting external circumstances.
Agile’s focus on transparency and adaptive
• Rollout and Enhancements: Once the MVP is
processes is one way communications teams can
improved based on the pilot, the garage team
make sure their messaging keeps up.
partners with the chief human resources officer
and relevant business leaders on a broader ING’s Cross-Staffed Content Teams:
implementation. Even after rollout, the garage Responsive Publishing
periodically enhances and updates the solution
ING’s communications function restructured
based on more feedback.
its content production teams to swiftly align
The innovation garage team found that two of its to changing business objectives and mirror
creations, both virtual assistants, allowed employees the larger organization’s adoption of Agile.
and HR staff to use tens of thousands of hours each Cross-staffed project teams at the multinational
year for other work. One “assistant” made it easier financial services firm brought together a
for managers to find and select the right job code for diverse group of specialists for sprint-style
a new or existing position, eliminating rework — and collaboration.
freeing up an estimated 20,000 manager hours and One example: ING’s “wholesale banking squad,”
nearly 4,000 HR hours per year. Another answered a cross-functional group of specialists, each
HR FAQs, increasing the accuracy of responses to with expertise in areas such as writing, video,
employee questions, saving 25,000 employee hours channels, business partner relationships, events
and 20,000 HR hours per year. or branding.

Sprints intersperse periods of simultaneous work The Kanban board documents campaigns
by all team members with stand-up meetings underway on sticky notes, placed according to
that keep everyone coordinated, improving the internal business unit they support and the
quality and speeding time to publish (see Figure target audience.
3). Sprints for large projects may run over three In some cases, the board allows team members
to four weeks with weekly stand-up meetings, to confirm that various campaigns and tactics
whereas smaller content pushes require only one are strategically aligned. At other times, its visual
meeting, with publication just a few days later. nature reveals conflicts, requiring adjustments to
The wholesale banking squad has authority to the nature or sequencing of campaign activities.
pursue the projects it judges best for its audiences The communications leaders implemented stand-
and the business. Accountability for the results up meetings as a pilot with a focus on continuous
motivates squad members to take ownership. improvement. Survey results revealed that
Since implementing these techniques, content 80% of team members felt that the stand-ups
impact and response times have improved. In increased awareness of projects throughout the
fact, ING’s communications team credits Agile department, while 65% thought these huddles
for its ability to forge immediately ahead when helped identify opportunities for collaboration.
business goals changed as the coronavirus Feedback led leaders to provide a standard
spread. The squad published four scenarios for format for the boards and extend meetings
the global economy and financial markets — from 15 to 30 minutes. In essence, they took an
through the pandemic and beyond. agile approach to Agile, a concept all functional
leaders can learn from.
Economical Insurance’s Kanban and Stand-
Up Meetings Integrating Marketing and 1
2019 Audit Budget and Headcount Survey
Communications 2
2020 Gartner Agile HR Function Survey
Communications leaders at Economical 3
2018-2019 Gartner Communications Leadership
Insurance used a Kanban board and stand-up Council Agenda Poll
meetings to increase collaboration and dialogue
between newly integrating marketing and
communications functions.
Figure 3. Stand-Up Meetings and Synchronous Work
Short stand-up meetings are held as often as needed to realign the

team and ensure everyone is making good progress on the project.
Stand-Up Stand-Up Stand-Up Stand-Up
Stand-Up
Meetings
Synchronous
Work
Synchronous work by all team members — who can help each other if
their part of a project is held up — keeps the project moving at all times.
Content delivered!
Source: Adapted From ING
3Q20 67
Briefs
Smarter Spending & Planning
To Deliver Cost Savings, Carrots Are as Crucial as Sticks

CFOs build their cost reduction strategies by first Support cost-saving activities within business
securing C-suite and board-level support. Then units by offering resources, including consulting
they begin wielding the proverbial “big stick,” services or technology, to develop better
establishing aggressive targets and enforcing insights. Finance teams can develop benchmarks
them through a tracking mechanism. to demonstrate how certain cuts in spending
won’t undermine core business objectives.
Yet only half of finance teams are effective
CFOs should also consider a blend of social
at delivering cost savings initiatives. This is
incentives to help promote a positive culture
because they often fail to balance out the big
around cost savings, such as an intra-company
stick approach with a tasty carrot or two. Finance competition. Some CFOs are introducing
leaders can avoid generating unnecessary winbacks that allow business units to regain a
tension with functional leaders by providing portion of their cost savings and use the money
collaborative decision-making support and to fund innovative projects or perhaps as an
developing attractive incentives. additional bonus payout.
— Brian Stickles
Fast-Track Support for Critical Suppliers in Distress

When COVID-19 troubles hit suppliers hard, For financial support, the company will
standard support may not be enough and normal seek guarantees that “we’re not just sinking
channels could be too slow. One procurement money into a creditor payment pool” for
head created a flexible assistance system that organizations that will fail, this procurement
mitigates financial risk. head told us. Contingencies would allow
For potentially vulnerable vendors, particularly access to something of value if the supplier
those with access to confidential technology collapses. Nothing’s off the table as an ask
essential to the business, the procurement — from materials to intellectual property.
head approached top management to arrange An example: first right of refusal to offer a
the following: job to a staff member with “skills, expertise,
1. Allow procurement to act on its own for smaller knowledge, history which would be valuable
steps, like modifying payment terms, bringing to us,” he said.
work forward or advancing payments. Ultimately, the company hopes to keep its
2. Give procurement a fast-track mechanism to get most important suppliers alive — and leave
executive committee approval for bigger actions a good impression that lasts as conditions
like acquiring a vendor or investing in its stock. improve.
— Jessica Kranish

Talent & Culture
How to Unlock Workforce Responsiveness

A responsive workforce is at least 20% more 1. Instead of the occasional overhaul to roles and
likely to overperform against corporate goals structure, make smaller ongoing adjustments
such as profit, customer satisfaction, productivity to stay aligned to the way work gets done
and innovation. Responsive employees know day-to-day on the ground.
customers well, anticipate changing needs 2. Make workload manageable by setting clear
and can shift resources and adjust direction as boundaries for team activities. This will help
needed. But only four in 10 meet this description. teams prioritize tasks, connections and
The problem isn’t staff – they are confident in information effectively.
their ability to adopt agile practices and they 3. Increase resource mobility by pushing
want to work in this way. allocation decisions to managers and teams.
What stops them are four areas of friction on This will help budget and talent quickly shift to
the job: too-rare reassessment of work design, areas of need.
overwhelmed teams, trapped resources 4. Change the default answer from “no” to “go”
and rigid processes. Happily, it’s possible to to make processes flexible and give new ideas
ease conditions: a chance to flourish.
— Cian O’Morain
Mental Health Offerings Can Boost Engagement

The majority of millennials and Generation Z, who A few adjustments can keep this help available
now collectively make up the largest segment of in a virtual world. For instance, organizations can
the workforce, say they want more support from establish digital support groups using secure
their employers in managing stress. technologies to increase the reliability and scale
During the era of remote work and lengthy of access. This is important because, while
lockdowns, this assistance is needed more than only 17% of employees participated in mental
ever. Employees report a wide range of negative well-being benefits last year, organizations are
emotions and symptoms, including loneliness, already seeing a surge in their use of benefits
exhaustion, sadness, irritability and insomnia. that support employees’ mental well-being. In
fact, some vendors offering virtual mental health
The following offerings typically have a positive
support have reported a 50% increase in the
impact on employee engagement:
number of sessions taking place during the first
1. Support groups (5.5% increase quarter of 2020.
in engagement)
Beware of mental health mobile apps, however.
2. Mental health assessments (3.1%) Research conducted before the pandemic showed
3. Employee assistance programs (2.5%) that they can damage engagement by 3.7%.
— Ben Szuhaj
3Q20 69
Briefs
Growth & Innovation
R&D Leaders Look One Step Ahead

In the initial stage of the pandemic response, to identify risks and uncertainties, but also to
research and development (R&D) leaders unearth opportunities. Use scenarios to stress test
prioritized immediate customer needs and short- the resilience and viability of the entire portfolio.
term projects to bring in fast revenue. Now it’s time Thinking ahead also means reevaluating R&D
to scan the horizon and identify investments to strategy and plans. Reassess technology and
safeguard the lasting viability of their organizations. product roadmaps against a list of megatrends
R&D leaders who look one step ahead can help your organization wants to exploit. This exercise
their companies adapt to new market realities once will highlight any existing capability gaps.
economic conditions improve.
Teams can then use a structured decision
This means probing how customer priorities and framework to either accelerate, retire or defer
expectations have changed during the crisis. investments, freeing up resources for strategic
R&D will get valuable clues to inform the next growth opportunities.
stages of product development. These actions will help explain the growth
Scenario planning is a useful tool—not only potential of the product plan to stakeholders.
— Svetlana Golden
The Art of the Virtual Sales Pitch

Pitching to a prospect over video or phone is a very 4. Make selective use of expert participation
different experience than a live meeting. But the regardless of location.
pandemic is driving change: in a June poll, 23% of 5. Create shorter content that’s suited to 30-, 45-
chief sales officers reported plans to permanently or 60- minute intervals.
shift field sales roles to virtual positions.
6. Prioritize information that is critical to educate
In a virtual setting, customers are likely to customers and provide buying help that
have lower attention spans, their behavioral requires stakeholder inputs and or approval to
cues are harder to read and stakeholders may advance the conversation.
be reluctant to speak up making it difficult to
facilitate consensus. 7. Set and communicate expectations
about shorter but potentially higher
Sellers can adapt with these tips: number of meetings.
1. Communicate a narrowly scoped agenda. 8. Clarify next steps and promptly email those
2. Limit the number of participants; tightly details to follow up.
define their roles and objectives. 9. Ask the senior customer stakeholder to stay
3. Intentionally use pauses to prompt customer on the meeting platform for five extra minutes
participation and check for comprehension. to discuss progress with the seller.
— Neha Ahuja

Data & Technology
4 Enforcement Priorities for California’s New Privacy Law

The global pandemic didn’t stop California Attorney 3. Data valuation calculations – Becerra’s office
General Xavier Becerra from promptly starting to has worked with accountants to determine
enforce the state’s new privacy law when it was how to do this.
permitted in July. Violation notices went out fast.
4. Protection of minors’ personal information
While we don’t offer legal advice, insights from – parents must approve sale of data for
Becerra’s staff, privacy lawyers and activists,
anyone under 13.
suggest the state has four priorities for compliance
with the California Consumer Privacy Act (CCPA). Taking steps now could pay off later. If the
1. A website link for consumers to opt out of the ballot initiative known as “CCPA 2.0” passes in
sale of their personal data—this requirement November, creating a new privacy enforcement
is different from provisions in the EU’s General agency, the risk of noncompliance will be higher
Data Protection Regulation (GDPR). because the new agency will get $10 million in
2. Health data – inform employees what the funding. In addition, more than a dozen U.S. states
company is collecting and why. are weighing privacy laws modeled on the CCPA.
— Laura Cohn
Data Scientists Are Hiding In Plain Sight

Although data scientists are a scarce commodity 3. Define each comparison role as a set of
in the labor market, their skills and competencies skills. Examples: applied mathematician—
for the role are more common—or more possible algorithms, design of experiments;
to cultivate—than you might think. To identify librarian – creativity, problem solving,
staff you can train and expand the candidate customer orientation.
pool, deconstruct the job into its requirements 4. Measure the semantic distance between a
and look for others who have similar knowledge data scientist and comparison role using
and work activities. a method like the Jaccard Index or cosine
1. Capture up to 100 skills associated with similarity technique. On a scale of zero to one,
the data scientist role. Examples: machine a zero means the two are entirely dissimilar
learning, project management, product and one means they are identical.
development, data mining, natural language 5. Map your findings to illuminate which roles
processing, SQL, Hadoop, Python. are closest and to weigh whether you can
2. Use a job description database to generate teach those farther away to close the gaps.
a list of potentially adjacent roles. Examples:
applied mathematician, data analyst, digital
marketer, librarian, professional gambler.
— Ariel Silbert and Farhod Yuldashev
3Q20 71
A New Role
for CFOs in
Capturing
Value
COVID-19 drove businesses

to assimilate, but outinvesting
and outfinancing competitors
doesn’t lead to long-term value.
To protect ROIC, reprioritize
resource allocation.
Commit to funding
competitive differentiators
gartner.com/en/publications/
cfo-funding-differentiation

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Gartner

How to Rebuild Better

Lasting Redeployment Lessons

Prioritize Spending That

The Pandemic, Protests and a

The Next Step for Forging

As Demand Soars for Pandemic

How to Rebuild Better

Departments Top Story

5 The Cutting Edge 3Q20 10 Lasting Redeployment Lessons

27 How One CFO Is Laying the Foundation 44 Mass-Produced Personal

30 The Pandemic, Protests and a 50 Because Every Hire Counts, Recruiting

40 As Demand Soars for Pandemic 63 Applying Agile Methods Outside IT

4 Gartner Business Quarterly

New Markets Are Not a Priority for 2021

How CMOs Plan to Fuel Growth in 2021

Increasing Sales Through Strategic

0% 25% 50% 0% 25% 50%

The Supply Chain Pendulum Swings From Efficiency

Expected Increase in Supply Chain Resilience

Supply chain executives told us they are pursuing these strategies:

6 Gartner Business Quarterly

Help Vulnerable Customers, and They Will Help You:

Financial Empowerment Actions and Their Effect on Customer Relationships

Returning to the Workplace: The End Is Not the End

Workforce Workforce Health Protocol Business External

• Do employees • Is the workforce • Do protocols • Are we meeting • Are cases

Potential Data Sources

• Pulse surveys • Self certification • Location • Business • CDC website

Enterprise risk management leaders are:

8 Gartner Business Quarterly

• Which employees Includes Return to

Prepare a smooth transition

© 2020 Gartner, Inc. and/or its affiliates.

Now that the pandemic has ripped apart the

10 Gartner Business Quarterly

Currently Considering Not Considering I Don’t

Redeploying Staff to Other

Upskilling Talent 42% 37% 16% 4%

Redesigning Roles to Free Up Capacity for

Creating Rotational Programs to Fill

Centralizing Pools of Talent to Work on

Hiring More Contingent Labor 15% 21% 57% 7%

Sharing Talent With Another Organization

12 Gartner Business Quarterly

Figure 2. Senior-Level Engagement and Integrated Action to Instill Commitment to Redeployment

Announce Talent Bridge as part of ongoing

Publicize Talent Bridge success stories while

Conduct Talent Bridge educational sessions

Complete online training on

Source: Adapted From Blue Shield of California

14 Gartner Business Quarterly

Line Recruiting Line Recruiting

Talent Compensation Talent Compensation

Figure 1. Performance on Growth, Profitability, and Investment Efficiency

16 Gartner Business Quarterly

Figure 2. Long-Term Value Realization Role Clarity and Interdependencies

Set and monitor growth Set margin structure Prioritize deployment

Functional Deliver services to Deliver operating Deliver services to

18 Gartner Business Quarterly

Strategic Operational Financial Process Design

Skills • Influence • Customer and • Financial • Design thinking

Potential • Senior business • Operational or • Senior finance • Certified experts

5 The Cutting Edge 3Q20 10 Lasting Redeployment Lessons

27 How One CFO Is Laying the Foundation 44 Mass-Produced Personal

30 The Pandemic, Protests and a 50 Because Every Hire Counts, Recruiting

40 As Demand Soars for Pandemic 63 Applying Agile Methods Outside IT